NEW YORK—U.S. stock indices registered modest increases on Thursday following a fresh wave of positive news regarding inflation within the nation. The S&P 500 advanced by 0.4%, inching closer to its all-time high, just 1.6% away. The Dow Jones Industrial Average increased by 101 points or 0.2%, while the Nasdaq composite saw a 0.2% uptick.
Oracle was a standout performer in the market, surging 13.3%. This boost followed the announcement that the company had exceeded analyst expectations with its recent quarterly profit and revenue. Oracle’s CEO, Safra Catz, also predicted a significant rise in revenue growth for the coming fiscal year.
In contrast, Boeing faced challenges due to a 4.8% decline in its stock after a tragic incident involving a London-bound Air India flight that crashed shortly after taking off from Ahmedabad airport. The Boeing 787 Dreamliner, carrying 242 individuals, crashed into a residential area just five minutes post-departure. The cause of this unfortunate event remains undetermined at present.
The stock market received a boost from declining Treasury yields in response to the latest inflation data. Reports indicated that inflation at the wholesale level was not as severe last month as economists had projected. This followed similar findings on Wednesday concerning the everyday inflation experienced by American consumers. This data revitalized expectations on Wall Street that the Federal Reserve could have more flexibility to cut interest rates to bolster the economy later this year.
The Federal Reserve has so far been cautious about reducing interest rates, mostly remaining on pause this year after a cut at the previous year’s end. Their hesitation is driven by concerns over how President Donald Trump’s tariffs might impact the economy and spike inflation. Although lower rates can stimulate economic activity by encouraging borrowing, they also carry the risk of increasing inflation.
Treasury yields responded to these developments, with the yield on the 10-year Treasury slipping to 4.35% from 4.41%, down from approximately 4.80% earlier in the year.
Additionally, a separate report on jobless claims contributed to the declining Treasury yields. The data indicated a slight increase in the number of U.S. workers applying for unemployment benefits last week, exceeding economists’ predictions. The overall number reached a peak not seen in eight months, potentially signaling a rise in layoffs nationwide.
Thierry Wizman, a strategist at Macquarie, noted that without the uncertainty stemming from the tariffs, the Fed might have resumed interest rate cuts given the inflation and labor market data.
The Federal Reserve’s upcoming meeting on interest rates is next week, with widespread anticipation on Wall Street suggesting that the rates will remain unchanged. However, traders, backed by CME Group data, are wagering that rate cuts could begin in September.
The changing dynamics of Trump’s tariff policies have caused anxiety about heightened inflation and a looming recession, which previously drove the S&P 500 to dip nearly 20% from its high a few months ago. Nevertheless, there has been a rebound in stocks, fueled by optimism that the tariffs will be rescinded after successful trade negotiations.
While several of Trump’s tariffs are presently suspended to allow for negotiations, uncertainty lingered following Trump’s Wednesday hint of possibly issuing ultimatums to other nations, pushing them to agree to terms.
In other market movements, Chime Financial experienced a remarkable 37.4% rise on its debut day of Nasdaq trading, aiming to establish itself as the central financial hub for customers by linking them with its banking partners. Conversely, GameStop saw a 22.5% decline after announcing plans to raise $1.75 billion by borrowing at a zero-interest rate. The lenders retain an option to receive repayment in GameStop stock rather than cash.
Ultimately, the figures reveal the S&P 500 climbed 23.02 points to settle at 6,045.26, the Dow Jones Industrial Average gained 101.85 reaching 42,967.62, and the Nasdaq composite rose 46.61, concluding at 19,662.48.
Elsewhere, stock markets in Europe and Asia demonstrated mixed results with minor shifts. Notably, Hong Kong’s Hang Seng index stood out by dropping 1.4% after a streak of gains. However, it remains significantly up by nearly 20% this year, dwarfing the U.S. market’s sub-3% ascent.