Stocks rose on Wall Street Tuesday, with the Nasdaq composite hitting another record high and the S&P 500 inching closer to its own all-time high. The late gains capped off a day of trading that was mostly shaky as investors digested a mixed report on inflation and awaited a crucial update on Wednesday.
The S&P 500 index climbed 0.5% to 5,246.68, just 0.1% below its record high set in late March. The Dow Jones Industrial Average also saw gains, rising 0.3% to 39,558.11.
The tech-heavy Nasdaq composite surged 0.8% to 16,511.18, setting a new record high. Technology stocks have been a major driver of the market’s gains this year.
In a throwback to the social-media driven frenzy of three years ago, “meme” stocks like GameStop and AMC Entertainment saw significant gains, with GameStop jumping 60.1% and AMC rising 32%.
An update on inflation showed that prices remain high at the wholesale level, signaling potential challenges for consumers down the line. The report is the first of two major inflation updates this week that are closely watched by Wall Street.
Bond yields edged lower, with the yield on the 10-year Treasury slipping to 4.45%. The yield on the two-year Treasury, which tracks expectations for actions by the Federal Reserve, fell to 4.82%.
The focus now shifts to Wednesday’s release of the monthly update on consumer prices, with economists expecting the consumer price index to ease to 3.4% in April. Investors are adjusting their expectations for interest rate cuts as inflation remains elevated.
Despite the strong economy, concerns about inflation persist, with consumers potentially feeling the strain of rising prices. Retail sales data expected on Wednesday could shed light on consumer spending habits.
Federal Reserve Chair Jerome Powell reiterated the central bank’s stance on interest rates, noting that a response to stubborn inflation is unlikely. Earnings reports have been a bright spot for markets, supporting gains in May after a tough April.
Overall, stocks were mostly higher in Europe and mixed in Asia, with Chinese markets slipping following U.S. plans to raise tariffs on imports from China. The market outlook remains uncertain as investors navigate inflation concerns and economic data.
