Why Are Stocks Up Today?

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  • Stocks are seeing green today with each of the three major indices trending up between 0.5% and 1%.
  • The S&P, Nasdaq and Dow are trending at their respective highs after yesterday’s close.
  • Investors appear to be in a good mood after a relatively strong Consumer Price Index (CPI) inflation report this morning.
stocks up today - Why Are Stocks Up Today?

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The stock market is on the climb today with most major indices enjoying strong early gains. This includes the S&P 500 and Nasdaq Composite, which are each at record highs. Why are stocks up today?

Well, it appears investors are in a cheery mood after a relatively promising consumer price index (CPI) inflation report. Indeed, inflation decelerated to 3.4% annually from 3.5% in March, in line with forecasts.

Investors have been eager to see signs of cooling inflation out of hopes for interest rate cuts. Unfortunately, this year has been earmarked by stubbornly elevated inflation and hawkish sentiment from the Federal Reserve that rate cuts will have to wait until inflation is more well managed.

As such, it appears even the modest CPI improvement seen today is enough to spark a rally.

“Inflation-related data continues to be translated as to how the Fed interprets the path of inflation and whether it offers – even at the margin – confidence that inflationary pressures are easing,” said Quincy Krosby, Chief Global Strategist at LPL Financial. “Markets are keenly watching if the probability of an earlier rate cut is gaining momentum.”

Why Are Stocks Up Today?

The S&P and Nasdaq are up 0.85% and 1%, respectively, as of this writing. This pushes the latter index to its seventh record high of the year in a strong year for stocks.

Indeed, even despite the April slump, the Nasdaq is up about 13% year-to-date (YTD) while the S&P is up 11.5% over the same period. Even despite elevated interest rates, strong earnings have bolstered the bulls this year, leading the stock market to new peaks.

The Dow Jones Industrial Average is also up today by about 0.6% and 5.5% for the year so far. The Dow is trending around its highest level ever as well.

“It has become clear to us that we underestimated the strength of the market momentum,” noted BMO Capital Markets Strategist Brian Belski.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.


Article printed from InvestorPlace Media, https://investorplace.com/2024/05/why-are-stocks-up-today-40/.

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