NEW YORK: The main US stock indexes touched multi-month highs on Thursday as Treasury yields slid after a slew of economic data pointed to easing price pressures, offsetting concerns about the Federal Reserve sticking to a hawkish monetary policy.
Data showed US retail sales unexpectedly rose in May as consumers spent on a range of goods including vehicles. Another data set showed jobless claims were unchanged at a seasonally adjusted 262,0000 for the week ended June 10, but were above economists’ forecast of 249,000 claims.
Additionally, import prices fell in May and the annual decrease was the sharpest in three years.
US Treasury yields pulled back, lifting shares of rate-sensitive growth stocks. Apple, Microsoft and Meta Platforms gained between 0.7% and 2.6%.
“At this point there is a great deal of money on the sidelines of people who’d been scared of recession, and as the worries go away people are returning to equities,” David Russell, vice president of Market Intelligence at TradeStation, said.
“My sense is the market has gone through a more structural bullish change.” The Fed left rates unchanged at the 5%-5.25% range on Wednesday, but indicated they could rise by at least half a percentage point this year as inflation remains stubbornly persistent and the US economy stays resilient.
Traders see a 69% chance of a 25-basis point rate hike in July, according to the CME Fedwatch tool.
Dow component UnitedHealth rebounded from its losses in the previous session and was up 2.9%.
Energy stocks led gains among the 11 major S&P 500 sectors, up 1.4%, as oil prices rallied over 2%.
The S&P 500 and Nasdaq hit fresh 14-month highs, while the Dow touched a six-month peak during the session, underpinned by signs of economic resilience, a better-than-expected earnings season and bets that interest rates are near their peak.
At 12:32 p.m. ET, the Dow Jones Industrial Average was up 382.88 points, or 1.13%, at 34,362.21, the S&P 500 was up 36.22 points, or 0.83%, at 4,408.81, and the Nasdaq Composite was up 83.39 points, or 0.61%, at 13,709.87.
Kroger Co dropped 4.1% after the big-box retailer missed first-quarter revenue estimates.
Kohl’s Corp rose 1% after TD Cowen upgraded the department store operator to “outperform” from “market perform”.
US-listed shares of Chinese companies Alibaba Group and JD.com rose 2.7% and 3.2%, respectively, after the People’s Bank of China cut the borrowing cost for its medium-term policy loans for the first time in 10 months. Advancing issues outnumbered decliners for a 2.26-to-1 ratio on the NYSE and a 1.51-to-1 ratio on the Nasdaq.
The S&P index recorded 34 new 52-week highs and no new low, while the Nasdaq recorded 55 new highs and 58 new lows.
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