Wall Street returned to its highest level in more than a year on Wednesday after a report showed inflation cooled a bit more than expected last month, which hopefully takes some more pressure off the economy. The S&P 500 rose 32.90, or 0.7% to 4,472.16 to reach its strongest closing level since April 2022. The Dow Jones Industrial Average rose 86.01, or 0.3%, to 34,347.43, and the Nasdaq composite gained 158.26, or 1.2%, to 13,918.96. Treasury yields tumbled in the bond market as the cooler inflation data pushed traders to ratchet back bets for hikes to interest rates by the Federal Reserve later this year, Most stocks rose on Wall Street, from flashy Big Tech behemoths to staid utility companies, though the gains faded a bit as the day progressed, the AP reports.
The US government's latest update on inflation showed that consumers paid prices for gasoline, food, and other items that were 3% higher overall in June than a year earlier. That's down from 4% inflation in May and a bit more than 9% last summer. Perhaps more importantly, it was a touch lower than economists expected. Traders remain nearly convinced the Fed will raise the federal funds rate at its meeting in two weeks to a range of 5.25% to 5.50%, which would be its highest level since 2001. But expectations are also climbing for that to be the final increase after rates started last year at virtually zero.
On Wall Street, Microsoft and Nvidia were the two strongest forces pushing up the S&P 500, and each rose at least 1.4%. Banks gained ground on hopes for a halt to rate hikes. Earlier rate increases strained their business by knocking down the value of loans and bonds bought when rates were ultra low. Following the March collapses of three banks, their stocks tumbled as Wall Street hunted for the industry's next potential weak link. Comerica rose 3.8%, and KeyCorp. rose 4.6% for two of Wednesday's bigger gains in the S&P 500. Domino's Pizza jumped 11.9% for the biggest gain in the index after it announced a partnership where customers can order its pies through Uber Eats.
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