The U.S. stock market had a record session on Wednesday, with S&P 500, Nasdaq, and Dow Jones closing at all-time highs. The big day was prompted by a promising customer price index report, which showed signs of cooling inflation and was perceived by investors as an indicator of incoming interest rate cuts.
S&P 500 saw a 1.17% jump, closing at a record 5,308.15 points. This was the first time that the index surpassed the 5,300 mark.
The Dow Jones Industrial Average had a 349.89-point jump, or 0.88%, to get to 39,908 and approach the 40,000 points mark. Nasdaq Composite, on the other hand, recorded the highest jump of 1.40% and closed at 16,742.39.
The CPI rose 0.3% in April, coming below the predicted 0.4%, which was the increase in March. However, the CPI’s increase of 3.4% over the span of 12 months was as expected. Additionally, the key core inflation, which doesn’t take into account the cost of food and energy, also showed signs of cooling down.
“Markets really wanted these reports to be soft, and they got what they wanted,” Macro Institute’s senior investment strategist Brian Nick told CNBC.
The traders now expect that the Federal Reserve will look into easing interest rates sooner rather than later. According to the CME FedWatch Tool, there is a 75.3% probability that the Fed will announce a rate cut at its meeting in September.
