The S&P 500 and the Nasdaq Composite reached new all-time highs on Wednesday as Federal Reserve Chair Jerome Powell expressed optimism that inflationary pressures were easing. Meanwhile, investors eagerly anticipated the release of consumer inflation data for June, scheduled for Thursday.
The technology-heavy Nasdaq surged 1.2% to 18,647.5, while the S&P 500 climbed 1% to 5,633.9. The Dow Jones Industrial Average also performed strongly, advancing 1.1% to 39,721.4. Gains were widespread across all sectors, with technology leading the charge, posting a 1.6% increase.
Powell conveyed his cautious optimism during his testimony to the House Financial Services Committee, asserting that he has “some confidence” that inflation is cooling. However, he added, “The question is: Are we sufficiently confident that it is moving sustainably down to 2%? And I’m not prepared to say that yet.”
These remarks echoed those he had made to the Senate Banking Committee the previous day, where he acknowledged “modest further progress” in recent inflation data. He added that “more good data” would bolster policymakers’ confidence in achieving their 2% inflation target.
On the bond market, the US 10-year yield decreased by 1.7 basis points to 4.28%, while the two-year rate fell by one basis point to 4.62%.
The government is expected to release data on Thursday revealing that the US consumer price index rose by 0.1% sequentially and 3.1% annually in June, according to a Bloomberg-compiled consensus. Following this, official producer price data for June are slated to be released on Friday.
In other economic indicators, mortgage applications in the US dipped last week due to a recent rise in interest rates, as reported by the Mortgage Bankers Association on Wednesday.
In the commodities market, West Texas Intermediate crude oil increased by 1.2% to $82.42 per barrel. Government data released on Wednesday indicated a surprise draw in commercial crude stockpiles last week, alongside a decline in motor gasoline inventories.
The Organization of the Petroleum Exporting Countries (OPEC) maintained its 2024 and 2025 global oil demand growth forecasts, keeping them at 2.2 million barrels per day and 1.8 million barrels per day, respectively, according to its July monthly oil market report.
In corporate news, CarMax (KMX) shares surged by 6.5%, marking the second-largest gain on the S&P 500. Oppenheimer noted in a client report that used car prices in the US appear to be stabilizing, a trend that could benefit major retailers in the sector, particularly CarMax. Carvana (CVNA) also saw a rise, closing 4.2% higher.
Conversely, Intuit (INTU) experienced a significant decline, falling 2.6% on both the S&P 500 and the Nasdaq. The financial technology company announced plans to lay off 1,800 employees and shutter two locations as part of a restructuring strategy aimed at boosting its investments in artificial intelligence.
In the precious metals market, gold rose by 0.4% to $2,377.90 per troy ounce, and silver inched up by 0.1% to $31.10 per ounce.
