S&P 500 Nears Record High as Traders Await Key Inflation Data

A surge in the world’s largest technology companies has pushed the S&P 500 near a new record high, with investors looking to upcoming inflation data for insight into the Federal Reserve’s future actions. Despite mixed signals from producer inflation and Jerome Powell’s indication of prolonged high interest rates, the S&P 500 is only points away from its all-time peak, driven by gains in Nvidia Corp. and Tesla Inc. among the “Magnificent Seven” megacaps.

April’s US inflation data is expected to show the first moderation in six months, suggesting that price pressures could begin to ease after several surprises. The core CPI’s projected 3.6% rise over April 2023 would be the lowest annual increase in three years, yet still above the threshold for rate cuts. Meanwhile, the S&P 500 reached 5,240, and meme-stock traders reignited interest in GameStop Corp. and AMC Entertainment Holdings Inc., reminiscent of the retail trading frenzy during the pandemic. Treasury 10-year yields dropped to 4.44%.

Corporate Highlights:

• Oracle Corp. ( $ORCL) is nearing a $10 billion cloud contract with Elon Musk’s AI startup xAI, sending its shares higher.
• Google ( $GOOG) announced a major update to its search engine, incorporating AI-generated responses, marking one of its most significant changes in decades.
• Boeing Co. ( $BA) reported its lowest monthly jet deliveries since February 2022 as it slowed production to enhance quality.
• Home Depot Inc. ( $HD) faced its sixth consecutive quarter of sales decline amid a sluggish housing market and reduced demand for high-cost items.
• Tencent Holdings Ltd. ( $TCEHY) reported a surprising 62% earnings surge, contrasting sharply with Alibaba Group Holding Ltd.’s profit drop, underscoring the divergence between China’s internet giants in the post-Covid recovery.
• Comcast Corp. ( $CMCSA) plans to offer a streaming bundle including Apple TV+, Netflix, and Peacock to reduce subscriber churn, as announced by CEO Brian Roberts.
• Plug Power Inc. ( $PLUG) saw a significant share increase after receiving a conditional commitment for $1.66 billion in loan guarantees from the Biden administration to build up to six facilities.
• Verizon Communications Inc. ( $VZ) expressed interest in acquiring US Cellular Corp.’s stake in its Los Angeles business, contingent on a reasonable price agreement, according to the head of Verizon’s consumer division.