The US stock market experienced a mixed trading day on Thursday, with the S&P 500 holding near its record high as investors navigated the impact of cooling inflation and the Federal Reserve’s stance on interest rate cuts.
The S&P 500 edged up 0.3% after reaching a new all-time high above 5,400, while the Nasdaq Composite jumped 0.6% to set its own record. Tech stocks led the charge higher, but the Dow Jones Industrial Average dipped 0.3%.
Investors were faced with two major market-moving events: a lower-than-expected consumer inflation report and the Fed’s announcement regarding interest rates. Despite the Fed signaling a shift from three rate cuts to just one this year, Chair Jerome Powell emphasized that the projection is not set in stone. Traders are still pricing in two rate cuts starting in September.
The producer price index for May showed a 0.2% decrease, indicating a potential easing of inflation. Additionally, Tesla shareholders voted on a $56 billion pay package for CEO Elon Musk, with Musk confirming that the compensation and the company’s move to Texas had been approved by a wide margin. Tesla stock surged nearly 5% following his comments.
Meanwhile, Broadcom shares saw a significant increase, boosting market sentiment towards AI and tech stocks. The chipmaker, a key supplier to Apple, is on track for its biggest gain since 2020 after reporting strong results driven by demand for AI technology.
Overall, the S&P 500 and Nasdaq remained near record highs as investors processed the Fed’s rate cut outlook and positive developments in the tech sector. The market continues to show resilience in the face of changing economic conditions and policy decisions.
