NEW YORK (AP) — U.S. stocks are trading relatively flat on Thursday following a mix of economic data, including positive news on inflation. However, expectations of interest rate cuts and the continued excitement on Wall Street surrounding artificial intelligence technology are keeping market indexes near their all-time highs.
The S&P 500 increased by 0.1% in afternoon trading, a day after reaching a record high. The Dow Jones Industrial Average was down 127 points, or 0.3%, as of 1:49 p.m. Eastern time. The Nasdaq composite rose by 0.2% and is hovering just above its record level.
In the bond market, Treasury yields continued to decline as investors anticipate a slowdown in inflation that could prompt the Federal Reserve to lower interest rates later in the year.
A recent report showed that wholesale inflation was not as severe as expected, with prices actually dropping from April to May, contrary to economists’ forecasts.
On Wednesday, a report on consumer inflation also provided positive news, with Federal Reserve Chair Jerome Powell calling it encouraging. Powell suggested that more data supporting a decline in inflation is needed before any decisions are made regarding lowering interest rates.
Despite some positive economic indicators, a report released on Thursday showed that more U.S. workers filed for unemployment benefits than anticipated. However, the number remains relatively low compared to historical levels.
Market sentiment is hopeful that economic growth and job market strength will continue to slow down enough to alleviate inflation pressures without causing a severe recession.
Companies closely tied to the overall economy were lagging in the market following the latest reports. For instance, Dave & Buster’s Entertainment saw a 9.1% decline in its stock price after reporting lower-than-expected profit and revenue figures for the quarter.
Despite economic challenges, some companies are thriving due to the growing interest in artificial intelligence technology. For example, semiconductor company Broadcom saw a 12.5% increase in its stock price after reporting better-than-expected profits for the quarter, driven by demand for AI technology.
Other companies, such as Nvidia, have also benefited from the AI trend, with their stock prices soaring and market values reaching new heights.
Tesla’s stock price rose by 3.8% after CEO Elon Musk expressed confidence that shareholders would approve his pay package. Musk had threatened to shift AI research to another company if the package was not approved.
In bond markets, Treasury yields fell, with expectations of interest rate cuts by the Federal Reserve later in the year. Fed officials are considering one or two rate cuts, which could provide a boost to investment prices.
Internationally, stock indexes in Europe declined as the leaders of the Group of Seven gathered in Italy. The European Parliament election results indicated a surge in support for far-right parties in countries like France and Germany.
In Asia, the Nikkei 225 in Japan slipped ahead of an interest rate decision, while indexes in Seoul and Hong Kong rose.
AP Business Writers Yuri Kageyama and Matt Ott contributed.
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