S&P 500 hits record high as traders sidestep hotter-than-expected-inflation reading

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  • US stocks advanced Thursday, pushing the S&P 500 to a record high.
  • Investors pushed past a hotter-than-expected May inflation print of 5%.
  • Stocks also found support as fewer Americans filed for jobless claims last week.
  • See more stories on Insider’s business page.

The S&P 500 climbed to a record high Thursday in a winning session for US stocks as investors appeared to embrace the Federal Reserve’s signals that hot inflation readings will be temporary and that it will stick with economic support measures.

The broad-market index soared to a record high just under 4,240 and the Nasdaq Composite surpassed 14,000 for the first time since early May. The Dow Jones Industrial Average gained ground after a string of three consecutive losses.

Stock indexes had been mixed early Thursday after the Labor Department said consumer prices in May rose 0.6%, a higher rate than expectations of 0.5%. Headline inflation jumped to 5% year over year, outstripping expectations of 4.6% from an Econoday survey of economists.

Separately, government data showed claims by Americans seeking unemployment benefits reached their lowest since the start of the coronavirus outbreak. New claims last week clocked in at 376,000.

Here’s where US indexes stood at 4 p.m. on Thursday:

Federal Reserve officials have signaled to market participants that they see inflationary pressures as transitory and that the central bank is unlikely to raise ultra-low interest rates before 2023.

“It is perhaps testament to how effective the Fed’s adjustment in communication has been recently since today’s [inflation] reading would likely have caused a very different reaction if it had come before the gentle shift in tone that has reassured investors about the responsiveness of Fed policy,” said Chris Beauchamp, chief market analyst at IG, in a note.

Around the markets, GameStop lost nearly 30% during the session after the video game retailer said it may sell up to 5 million shares and that the Securities and Exchange Commission has requested information as part of its investigation into the trading of its shares.

Clean Energy Fuels stock sank after regulatory filings revealed the company’s largest shareholder, TotalEnergies SE, cut its stake by more than 10 million shares.

Gold rose 0.4% to $1,895.38 per ounce. Long-dated US Treasury yields turned lower, with the 10-year yield down at 1.465% to its lowest since early March.

Oil prices rose, with West Texas Intermediate crude up by 0.5% at $70.28 per barrel. Brent crude, oil’s international benchmark, was up 0.3%, at $72.42 per barrel.

Bitcoin climbed 4% to $38,000 before paring gains to trade around $36,665.80.

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Dow soars 318 points to record high as investors weigh new economic-recovery data

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Traders work on the floor at the New York Stock Exchange.

  • The Dow Jones Industrial Average pushed to a record high on Thursday.
  • Stocks found support as fewer-than-expected Americans filed for jobless benefits.
  • Home Depot, P&G and Apple were all up, helping the Dow push to fresh highs.
  • See more stories on Insider’s business page.

The Dow Jones Industrial Average notched a new record high Thursday as stocks pegged to the reopening of the economy got a boost from new labor-market data.

The blue-chips index pushed higher with retailer Home Depot and consumer products giant Procter & Gamble among the best performing shares. Companies with exposure to economic recovery have largely advanced this year on the back of data showing the world’s largest economy is improving after the recession brought on by the COVID-19 pandemic.

The Labor Department on Thursday said jobless claims totaled an unadjusted level of 498,000 last week. That was less than the 538,000 claims expected, on average, by economists surveyed by Bloomberg. The reading marked a new low for the pandemic era and was the fourth consecutive weekly decline. The April jobs report due Friday could show US payrolls jumped to 938,000, according to an Econoday estimate.

Here’s where US indexes stood at 4:00 p.m. on Thursday:

Apple and Microsoft shrugged off earlier losses, aiding the Dow Jones Industrial Average.

The tech-heavy Nasdaq ended higher, though was in the red for most of the day.

Hilary Kramer, chief investment officer at Kramer Capital Research, noted that tech stocks are still struggling even as borrowing costs as implied by the 10-year Treasury yield have fallen below 1.6% after hitting 14-months highs above 1.7% earlier this year.

Nasdaq “valuations are completely out of whack with where we are with Main Street,” she told Insider on Thursday. “We have help-wanted signs everywhere from restaurants to mechanics shops … and what’s going to happen is people are going to stop spending.” She added that these pressures are being pulled forward to put the squeeze on tech stocks.

Around the markets, Etsy shares tumbled to five-month lows after the online marketplace said it expects quarterly sales on its platform to slow.

Peloton’s 15% sell-off following a treadmill recall has created a buying opportunity, according to Credit Suisse.

Gold rose 1.6% to $1,814.07 per ounce. Long-dated US treasury yields fell, with the 10-year yield at 1.561%.

Oil prices declined. West Texas Intermediate crude fell 1.2% to $64.83 per barrel. Brent crude, oil’s international benchmark, lost 1.2% to $68.11 per barrel.

Bitcoin fell 3% to $55,475.

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