Stock traders decided to look at the glass half full on Friday after data showed signs inflation is moderating, even if that comes at the expense of economic growth.
As the market continued to climb a wall of worry, major equity benchmarks advanced, with tech consolidating this year’s leadership.
The Nasdaq 100 is poised to notch a record first-half rally after adding roughly $5 trillion in value this year amid a seemingly unstoppable artificial-intelligence frenzy.
Apple hit the $3 trillion mark.
Treasury two-year yields, which are more sensitive to imminent Federal Reserve moves, were little changed. The dollar retreated.
Key measures of U.S. inflation cooled in May and consumer spending stagnated, suggesting the economy’s main engine is starting to lose some momentum.
The personal consumption expenditures price index, one of the Fed’s preferred inflation gauges, rose 0.1%.
From a year ago, the measure stepped down to 3.8%, the smallest annual advance in more than two years.
“Rate hike odds for July are still at 80%, so nothing here has really changed,” said Peter Boockvar, writer of the Boock Report.
The Fed will “have to use some impressive reasoning at the end of July in rationalizing another hike even though the pace of inflation last seen will be slower than the previous print when they paused.”
Elsewhere, the three-month London interbank offered rate for dollars fixed for the final time on Friday, ending 50 years as a global benchmark.
The rate for lending between banks rose roughly 1.2 basis points to 5.54543%
Brent oil is on course for its longest run of quarterly losses in data going back more than three decades as persistent concerns over the demand outlook and robust supplies weigh on prices.
West Texas Intermediate was heading for its first back-to-back decline since 2019.
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