Wall Street closes higher on moderating US inflation data, S&P 500 hits record

U.S. stock markets finished Thursday in positive territory, with the S&P 500 achieving a record high. The rally was fueled by new data indicating a slowdown in inflation, bolstering the likelihood that the Federal Reserve will maintain current interest rates at its upcoming meeting.

The Producer Price Index (PPI) in the United States increased by 4.7% year-on-year in July, a decrease from June's 5.5% and marking the second consecutive slowdown. This figure was also better than anticipated. On a monthly basis, producer prices remained unchanged. This follows yesterday's positive market reaction to a slight decrease in consumer prices (CPI) to 3.4%, attributed to lower fuel costs.

In other economic news, weekly jobless claims rose by 9,000 to 209,000, exceeding expectations and marking the first time in nearly a month that the figure has surpassed 200,000. Despite these figures, market indicators suggest investors believe the Fed will not raise rates in September and have reduced expectations for further hikes this year.

Sector-wise, communications and technology companies saw the most significant gains, continuing an optimistic trend that contrasts with recent volatility caused by concerns over artificial intelligence. However, corporate news included notable drops for Cisco and Cerebras after they reported weaker-than-expected quarterly earnings. Other markets saw West Texas Intermediate (WTI) crude oil fall to $81.25 a barrel after the International Energy Agency (IEA) lowered its demand forecast for the remainder of the year.