Dow, S&P 500 close at record highs as cooler inflation eases worries about faster Fed
Thomson Reuters
- The S&P 500 and the Dow Jones industrial average finished at record highs on Wednesday.
- The indexes were propelled higher after consumer prices in July rose by 0.4%, slowing from June's 0.9% gain.
- The Nasdaq Composite index fell for a second straight day.
- See more stories on Insider's business page.
The S&P 500 and Dow Jones industrial average closed at new records on Wednesday after a widely watched inflation measure slowed in July, softening concerns that the Federal Reserve will quicken the pace of pulling back its economic-stimulus efforts.
The Consumer Price Index rose 0.5% last month, the Bureau of Labor Statistics said Wednesday. The gauge tracks the prices of various goods and services and aims to measure how much everyday prices change each month. The reading decelerated from the 0.9% gain seen in the prior month, suggesting price growth could soon return to pre-crisis levels.
The S&P 500's rise was led by material and industrial shares but investors pulled back from pricey large-cap tech stocks heavily featured in the Nasdaq Composite.
Here's where US indexes stood at 4:00 p.m. on Wednesday:
- S&P 500: 4,447.70, up 0.3%
- Dow Jones Industrial Average: 35,484.97, up 0.6% (220 points)
- Nasdaq Composite: 14,765.13, down 0.2%
"The inflation data for July moderated somewhat, at least relative to the heady pace of recent months, which should temper market and policymaker concerns a bit, despite the fact that inflation will stay sticky" for a while, said Rick Rieder, chief investment officer of global fixed income at BlackRock.
Investors have been concerned that inflation sitting at multiyear highs will prompt the Fed to start tapering stimulus measures such as purchases of bonds and other securities sooner than later, although Fed officials have suggested discussions surrounding those moves and raising rates are advancing.
Around the markets, Coinbase shares rose after the crypto exchange reported second-quarter earnings that outstripped analyst expectations, helped by a jump in trading volumes. The company's report also showed ether was the most-traded cryptocurrency on the exchange during the quarter, surpassing bitcoin.
Shares of biotech firms Moderna and BioNTech fell sharply following a report the European Union's drug regulator is investigating potential new side effects from the companies' respective COVID-19 vaccines.
Gold gained as much as 1.5%, to $1,754.47 per ounce.
Oil prices moved up. West Texas Intermediate crude rose as much as 1.7% to $69.45 per barrel. Brent crude, oil's international benchmark, gained 1.4%, to $71.60 per barrel, at intraday highs.
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