Stock market today: Wall Street rallies to records after inflation slows
U.S. stocks rallied to records on hopes that inflation is heading back in the right direction
NEW YORK — Hopes that inflation is finally heading back in the right direction swept through Wall Street Wednesday and ignited a record-setting rally for U.S. stocks.
The S&P 500 jumped 1.2% to top its prior high set a month and a half ago. The Nasdaq composite added 1.4% to its own record set a day earlier, and the Dow Jones Industrial Average gained 349 points, or 0.9%, to beat its all-time high set in March.
Relief came from the bond market, where Treasury yields eased to release some of the pressure on the stock market. The moves resulted from strengthening expectations among traders that the Federal Reserve may indeed cut its main interest rate this year.
Stocks that tend to benefit the most from lower interest rates helped lead the market. Real-estate stocks in the S&P 500 climbed 1.7%, while stocks of electricity companies and other utilities rose 1.4%. The dividends they pay look better to investors when bonds are paying less in interest.
Homebuilders were strong on hopes that cuts by the Fed could lead to easier mortgage rates, with Lennar, D.R. Horton and PulteGroup all rallying more than 5%. Big Tech and other high-growth stocks also rode the wave of expectations for lower rates, and Nvidia’s gain of 3.6% was the strongest force pushing the S&P 500 upward.
The optimism came from a report showing U.S. consumers had to pay prices for gasoline, car insurance and everything else in April that were 3.4% higher overall than a year earlier. While that’s painful, it’s not as bad as March’s inflation rate of 3.5%.
Perhaps more importantly, the slowdown was a relief after reports for the consumer price index, or CPI,
Read more on abcnews.go.com
