S&P 500 notches record closure as inflation fears subside, jobless claims fall

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S&P 500 notches record closure as inflation fears subside, jobless claims fall

On Thursday, all three key indices of Wall St. had closed out the session in an upbeat texture with benchmark S&P 500 spiking to a record closing high, as investors appeared to have brushed aside a long-term inflation fear after US CPI (Consumer Prices Index) data had unwrapped that a latest upsurge in inflation indicators were mostly tied to a robust reopening of US economy alongside a higher materials’ prices which would likely to abate in a near term as the US Fed Chair Powell had projected.

In point of fact, in the day’s Wall Street was largely pivoted by a US CPI data released earlier in the day that had shown the US Consumer Prices Index had jumped 0.6 per cent last month, while over the past twelve months through May, US inflation soared 5.0 per cent on an annualized basis, marking up the largest year-on-year gain since the August of 2008.

Nonetheless, a closer look into the CPI data had unveiled that a latest uptick in inflation indicators had been largely prompted by an increase in materials’ prices, which in effect had helped investors erase the worries of a prolonged period of inflation-surge.

On top of that, other economic data released earlier in the day had unveiled that the number of Americans filing for state unemployment benefits fell further below a 400,000-mark, bottoming to its lowest level since the onset of pandemic outbreak, while layoffs remained largely off the radar, eventually spurring up investors’ bet over a modest recovery in US labour market.

Adding further impetus, a US House of Representative Committee had approved a $547 billion infrastructure bill, espousing a larch bulk of the US President Joe Biden’s $2.3 trillion broader infrastructure proposals.

Wall St. rises as inflation fears ease

Citing statistics, in the day’s Wall St. closure, trade-sensitive Dow added 0.06 per cent to 34,466.24 and benchmark S&P 500 gained 0.47 per cent to wind up the session at a record closing high of 4,239.18, while tech-heavy Nasdaq soared 0.77 per cent.

Meanwhile, backing the US Fed Chair Powell’s view about a rapid inflation surge, a senior market strategist at LPL Financial in Charlotte, North Carolina, Ryan Detrick said, “Earlier this week we had extremely boring market days as we all had our eyes on the bullseye of this CPI report.

But once people looked under the surface, the majority of the higher inflation is due to the reopening, and stocks had a relief rally. The market is taking it in stride as it realizes the whole economy isn't overheating.