S&P 500 Hits Record High as Markets Anticipate Inflation Data

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US stocks surged on Wednesday, driven by anticipation of key inflation data and insights from Federal Reserve Chair Jerome Powell’s Congressional testimony. The S&P 500 reached an unprecedented high, closing above 5,600 for the first time. The Dow Jones Industrial Average jumped by 430 points, while the Nasdaq recorded a gain of over 1%.

Traders are intently focused on Thursday morning’s release of the June inflation report, seen as a crucial factor for setting future monetary policy. Economists predict a 3.1% year-over-year increase in consumer prices, down from May’s 3.3%. Powell highlighted that if this downward trend continues, it could reinforce the Fed’s confidence in bringing inflation back to its 2% target. However, he also cautioned that easing policy too slowly or insufficiently could jeopardize economic stability and employment.

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Despite Powell’s remarks, expectations for rate cuts remained steady. The CME FedWatch tool indicates that investors anticipate two rate cuts by year’s end, although some are beginning to entertain the possibility of three.

At the market close, the key index performance was as follows: S&P 500 at 5,633.91, up 1.02%; Dow Jones Industrial Average, 34,276.67, up 1.09%; and Nasdaq Composite, 18,647.45, up 1.18%.

In other notable developments, Tom Lee of Fundstrat underscored why the June inflation report will be pivotal for stock bulls. Elon Musk’s net worth soared by $67 billion amid Tesla’s 10-day upward streak. Additionally, record rent declines were observed in two states, despite rising prices nationwide. Investors have also earmarked over $250 billion to acquire distressed commercial real estate debt.

In the commodities, bonds, and cryptocurrency markets: West Texas Intermediate crude rose 1.08% to $82.30 a barrel, and Brent crude, the international benchmark, edged up 0.25% to $85.29 a barrel. Gold increased by 0.29% to $2,370 per ounce. The 10-year Treasury yield dropped by one basis point to 4.279%. Bitcoin dipped 0.55% to $57,416.