Another inflation report reinforced bets that the Federal Reserve is approaching an interest-rate peak, giving Wall Street an extra boost to bid up stocks.
Disinflation has suddenly become the buzzword on trading floors, with investors looking on the bright side of data showing a slowdown in prices - even though core inflation remains above the central bank's 2% target. Equities gained further traction following the resignation of Fed Bank of St. Louis President James Bullard, who had called for aggressive rate hikes.
The S&P 500 surpassed 4,500 points and the Nasdaq 100 gained more than 1.5% on Thursday. Amazon reached a 10-month high after reporting record Prime Day sales. Alphabet, Google's parent company, rose about 4.5%. Banks also outperformed JPMorgan, Citigroup, and Wells Fargo. Two-year yields have dropped 13 basis points to 4.61%. The dollar fell for the fifth day in a row.
The producer price index for final demand increased 0.1% year on year, the smallest increase since 2020. The figures came just a day after data showed that consumer prices rose at the slowest rate since 2021 in June.