S&P 500 reaches record high as investors await US inflation data


(MENAFN) On Wednesday, the S&P 500 index surged to a historic milestone, surpassing 5,600 points for the first time ever, driven by optimism among investors ahead of a crucial U.S. inflation report. The broad market index rose by 0.4 percent, marking its seventh consecutive day of gains. Similarly, the nasdaq Composite Index also reached an all-time high, climbing 0.5 percent by 16:50 GMT. The Dow Jones Industrial Average joined the rally with a 0.46 percent increase.

Investor sentiment was buoyed by strong performances in key sectors, including technology. Shares of Nvidia, a leading company in artificial intelligence, rose by 2 percent, lifting the stocks of other chipmakers such as AMD and Broadcom. Apple shares also contributed to the market's gains, climbing 1 percent to USD231 per share.

Market attention remains focused on the upcoming U.S. Consumer Price Index (CPI) report for June, scheduled for release on Thursday. Economists anticipate a modest 0.1 percent increase in monthly CPI and a year-on-year rise of 3.1 percent. The core CPI, which excludes volatile energy and food prices, is expected to show a 0.2 percent monthly increase and a 3.4 percent annual increase. Additionally, the producer price index (PPI) is set to be released on Friday.

Terry Weissman, FX and interest rate strategist at Macquarie Global, noted that despite recent signs of economic slowdown both in the U.S. and globally, equity traders have been optimistic. They have largely ignored downside risks, betting on continued liquidity injections and anticipating interest rate cuts by the Federal Reserve and other central banks later this year. Federal Reserve Chairman Jerome Powell's recent remarks warning against prolonged high interest rates further fueled market optimism.

The robust rally in U.S. stocks underscores market expectations of accommodative monetary policy and reflects investor confidence in continued economic support measures amid evolving economic conditions globally. 

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