- Stocks rose on Thursday after another strong inflation reading.
- The producer price index fell 0.2% from the previous month, compared with expectations of a 0.1% decline.
- Tesla shares surged after Elon Musk said his compensation package was due to be approved at X.
U.S. stocks extended their rally to record highs on Thursday as investors braced for yet another weaker-than-expected inflation reading.
The stock market closed Wednesday at an all-time high, and as trading opens on Thursday the market is on track to reach new all-time highs.
The producer price index fell 0.2% in May from the previous month, bucking expectations of a 0.1% decline. That was the biggest drop in the wholesale price index since October, according to Bloomberg. The producer price index rose 2.2% from a year ago.
“Thursday’s weaker-than-expected Producer Price Index (PPI) data was another sign of continued inflation development and keeps us on track for a rate cut in 2024,” said Clark Bellin, chief investment officer at Bellwether Wealth.
The PPI report showed similar weakness to the Consumer Price Index report for May, released on Wednesday, raising hopes that the Federal Reserve has room to cut interest rates later this year.
The 10-year Treasury yield continued to fall, down 2 basis points to 4.373%, after plummeting on Wednesday following the decline in the Consumer Price Index (CPI).
Fed officials pointed to evolving inflation but left interest rates on hold after this week’s policy meeting, with one cut planned, but investors are more optimistic, anticipating two 25-basis-point cuts, according to the CME FedWatch tool.
Tesla shares rose more than 6% after Elon Musk said at X that his $56 billion compensation package is pending shareholder approval. DealBook reported Thursday morning that Vanguard and BlackRock will vote in favor of the compensation agreement, giving Musk backing from two of the world’s largest asset managers.
U.S. stock indexes as of the start of trading at 9:30 a.m. on Thursday were as follows:
What else is happening today:
Commodities, Bonds and Cryptocurrencies:
- West Texas Intermediate crude oil fell 0.24% to $78.09 a barrel, while the international benchmark Brent crude rose 0.16% to $82.73 a barrel.
- Gold fell 0.20% to $2,318.42 per ounce.
- The yield on the 10-year Treasury note fell 2 basis points to 4.373%.
- Bitcoin fell 1.8% to $68,071.62.
