indices S&P 500 and nasdaq rose on Wednesday, helped by a slightly smaller-than-expected rise in April inflation and the latest AI release from Alphabet Inc.
He Consumer’s price index The Labor Department’s CPI index rose 4.9% in April from a year earlier, against expectations for a 5% increase, raising hopes that the rate hike cycle of the Labor Department Federal Reserve (fed) is near the end. The CPI month-on-month improved to 0.4%, after advancing 0.1% in March.
“Markets reacted positively because they viewed the inflation data as slightly positive,” said Michael Harris, president of hedge fund Quest Partners LLC. “The Fed is on pause now. They did their last rate hike and will wait and see for the next few months.”
The inflation data made the Nasdaq Composite rose as much as 1.17% to its best intraday level in more than eight months. He nasdaq was supported by a rise in alphabet as the company implemented more artificial intelligence for its main search product in response to competition from Microsoft Corp..
Large-cap technology stocks, including apple inc and Microsoft, they also went up. The technology sector index of the S&P 500 -sensitive to interest rates- and communication services advanced.
Growth companies are more dependent on borrowed money, so they benefit from lower rates.
Fed funds futures traders are pricing in a pause in rate hikes at the central bank’s June meeting, and a less than 5% chance of another 25 basis point hike.
He S&P 500 gained 18.47 points, or 0.45%, to 4,137.64 units, while the Nasdaq Composite it rose 126.89 points, or 1.04%, to 12,306.44 units. He Dow Jones Industrial Average it fell 30.48 points, or 0.09%, to 33,531.33 units.
Indices were volatile during the session as investors scrutinized the positive inflation reading alongside debt ceiling concerns.
Talks about raising the US federal government’s maximum debt limit to $31.4 trillion entered a new phase on Wednesday as some areas of possible compromise emerged after Tuesday’s White House meeting.
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