Wall Street Records Historic Highs for Stock Market as US Inflation Rate Drops to 3.4%

By Thea Felicity

May 15, 2024 01:25 PM EDT

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Stock market numbers are displayed on a screen at the New York Stock Exchange during afternoon trading on June 02, 2023 in New York City.
(Photo : Michael M. Santiago/Getty Images)

 In a live update from The Guardian, Wall Street celebrates reaching unprecedented highs following news of a decline in US inflation to 3.4%. 

The positive market sentiment is fueled by a report showing a slowdown in US consumer price inflation to 3.4% in April, providing some relief after several months of consistently high readings.

Although inflation remains elevated, the slight improvement from March's 3.5% rate is encouraging.

READ NEXT: Federal Reserve President Says US Economy Likely Slowing Down - Does This Hint at a Possible Interest Rate Cut Soon?

Record High Stock Market

Stocks that typically benefit from lower interest rates led the charge, with real estate and utility sectors climbing by 1.5% and 1.4%, respectively. Homebuilders rallied on hopes of reduced mortgage rates, with Lennar and D.R. Horton posting gains of over 3.6%.

The S&P 500 surged by 0.8% midday, surpassing its previous peak set in March, while the Nasdaq composite continued its upward trend, climbing by 1%. Simultaneously, the Dow Jones Industrial Average gained 250 points, a 0.6% increase.

Moreover, tech giants and high-growth stocks rode the wave of optimism, with Nvidia spearheading the S&P 500's ascent with a substantial 3.4% increase.

AP News reported that analysts believe the recent slowdown in inflation and expectations of action from the Federal Reserve have revived the stock market. 

However, there are worries about possible weaknesses in consumer spending, particularly evident in lower-than-expected growth in retail sales, which could challenge economic stability.

While Wall Street celebrates due to easing inflation worries, global markets are showing a mixed trend, with stocks in Shanghai declining by 0.8% after China's central bank decided to keep key lending rates unchanged.

READ MORE: Joe Biden's Chances of Winning Reelection Damped by Persistent Inflation Fears, New Poll Shows

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