Stocks continued to climb on Wednesday, with all three major indexes poised to close near or at record highs. This positive shift comes after a key economic data release: the Consumer Price Index (CPI).
The CPI rose a modest 0.3% in April compared to the previous month, and 3.4% year-over-year. This marks a slowdown from March and the slowest annual pace of core inflation (excluding food and energy) for all of 2024.
This data spurred investor optimism that the Federal Reserve may be more inclined to cut interest rates sooner than we thought. Lower interest rates are generally seen as a boon for the stock market, particularly for growth-oriented sectors like technology.
Market Movers:
- S&P 500 (^GSPC): Up 0.8%
- Dow Jones Industrial Average (^DJI): Up 0.6%
- Nasdaq Composite (^IXIC): Up 0.9% (after hitting a record close on Tuesday)
Beyond Inflation
While inflation is a persistent concern, other economic data points also influenced the market today. Retail sales came in flat for April, falling short of expectations. This indicates a more cautious consumer, most likely impacted by inflation.
Meme Stock Mania Cools
Meanwhile, the recent frenzy surrounding meme stocks like GameStop (GME) and AMC (AMC) appears to be subsiding. After skyrocketing prices on Tuesday, both stocks shed more than 20% by midday trading on Wednesday.
