S&P 500 reaches all-time closing high as markets rally on declining oil prices
The stock market hit new records Thursday as oil prices fell and inflation data came in line with expectations, with the S&P 500 closing at 7,798.99 and the Nasdaq gaining over 0.8%, boosted by strong earnings from tech giants.
Market Reaches Record Heights
The S&P 500 rose to a fresh all-time intraday high on Thursday as oil prices declined and traders digested more inflation data, with the broad market index adding 0.65% and surpassing 7,800 for the first time ever, notching a closing record of 7,798.99. The Nasdaq Composite gained 0.81% to end at 26,803.03, boosted by gains in Meta Platforms, Micron Technology and Netflix, while the Dow Jones Industrial Average inched up 0.13%, or 69.72 points, to 53,839.99.
Oil Prices Ease Geopolitical Tensions
Brent crude futures shed more than 2% to close at $87.07 per barrel. The decline in crude prices comes amid ongoing uncertainty regarding the Middle East conflict and its impact on energy supplies. The main stock indexes had been lower on Monday as oil prices and interest rates surged amid what looks more and more like a stalemate at the Strait of Hormuz, with investors, traders and speculators casting wary eyes on the Middle East ahead of the release of consumer and producer inflation data on Wednesday and Thursday.
Inflation Data Supports Market Recovery
The Consumer Price Index print showed inflation continued to cool in July to a 3.4% annual rate, matching economists' expectations and easing from June's 3.5% increase, with monthly inflation rising 0.1% from June. Despite a slight pullback, inflation remains stubbornly above the Fed's 2% target, complicating central bankers' decision on whether to hold or hike rates in September, and following Wednesday's inflation data, traders tilted their bets toward the Fed holding rates steady after a roughly 50-50 split the day before.
Looking Ahead
"For the Federal Reserve, this is a helpful report rather than an all-clear," according to Daniela Hathorn, senior market analyst at Capital.com, noting that "inflation is moving in the right direction despite the earlier energy shock, while recent weakness in the labor market gives policymakers even less reason to consider another rate increase in September." Market observers expect continued focus on geopolitical developments and upcoming economic data in the weeks ahead.