S&P 500 jumps 1% to post record close, ending session above 5,300 for the first time: Live updates

The S&P 500 and Nasdaq Composite popped to record highs Wednesday and added to their strong 2024 performances. The major averages were boosted by a lighter-than-expected U.S. consumer inflation report.

The broad market index gained 1.17%, breaking above 5,300 for the first time, to end at 5,308.15. The tech-heavy Nasdaq Composite rose 1.40%, to close at 16,742.39. The Dow Jones Industrial Average climbed 349.89 points, or 0.88%, ending at 39,908.00.

All three major averages closed at records. Year to date, this is the 23rd record close for the S&P 500, the 18th for the Dow and the eighth for the Nasdaq.

The consumer price index rose 0.3% for the month of April, less than the Dow Jones estimate for a 0.4% monthly increase. The gauge increased 3.4% year over year, in line with expectations. Monthly and yearly numbers for core CPI, which excludes volatile food and energy prices, were both in line as well.

Retail sales remained flat in April. Economists anticipated a 0.4% jump.

Both reports boosted expectations for Federal Reserve rate cuts in the near future. Fed funds futures trading data now suggests a 75.3% likelihood that the U.S. central bank will ease rates at its September meeting, according to the CME FedWatch Tool. This is up from Tuesday’s 65.1% chance of a rate cut in the same month.

“Markets really wanted these reports to be soft, and they got what they wanted,” said Brian Nick, senior investment strategist at the Macro Institute, who added that these readings solidified the case for the Fed to begin cutting rates this year. “Companies like Nvidia and a lot of these higher growth names are going to benefit from falling interest rates.”

Market leaders such as Nvidia popped upon the inflation reading, with shares of the GPU manufacturer rising 3.6%. Tech titans Apple and Microsoft both added more than 1%.

Yields on the benchmark U.S. 10-year and 2-year Treasurys dipped following the economic reports. The rate on the 10-year note fell about 10 basis points to 4.344%. The 2-year Treasury yield was last at 4.726% after sliding roughly 9 basis points.

Stocks have been on a tear this year, as expectations for lower Fed rates and enthusiasm around artificial intelligence — and its potential to boost profits — lifted investor sentiment. The S&P 500 is up more than 11% year to date. That said, the broad market index stumbled last month as worries over sticky inflation pressured equities.

Those concerns were quickly assuaged by new data and comments from Fed officials indicating rate hikes are unlikely going forward.