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The S&P500 And Nasdaq Composite soared to record highs on Wednesday, adding to their strong performance in 2024, boosted by a lighter-than-expected US consumer inflation report.

The broad market index rose 1.1% to rise above 5,300 for the first time, while the tech-heavy Nasdaq rose 1.3%. The Dow Jones Industrial Average climbed 288 points, or 0.7%, and was less than half a percentage point away from hitting an all-time high.

The consumer price index rose 0.3% in April, less than the Dow Jones estimate for a monthly increase of 0.4%. The gauge rose by 3.4% year on year, in line with expectations. Monthly and annual figures for the core CPI, which excludes volatile food and energy prices, were also in line.

Retail sales were flat in April. Economists had expected an increase of 0.4%.

Both reports reinforced expectations for Federal Reserve rate cuts in the near future. Fed Funds futures trading data now points to a 71.9% probability that the US central bank will cut interest rates at its September meeting, Fed figures show. CME FedWatch tool. This is more than Tuesday's chance of a 65.1% rate cut in the same month.

“The markets really wanted these reports to be soft, and they got what they wanted,” said Brian Nick, senior investment strategist at the Macro Institute, who added that these numbers strengthened the case for the Fed to start cutting this year of the interest. “Companies like Nvidia and many of these higher growth names will benefit from falling interest rates.”

Market leaders such as Nvidia came ahead of inflation figures, with the GPU maker's shares rising nearly 4%. Tech titans Apple And Microsoft both added more than 1%.

Yields on US 10-year government bonds and 2-year government bonds fell after the morning reports. The return on the 10-year treasury fell by almost 9 basis points to 4.359%. The 2 year treasury The yield last stood at 4.743%, after a decline of almost 8 basis points.

Stock markets fell this year as expectations for lower Fed interest rates and enthusiasm around artificial intelligence – and its potential to boost profits – improved investor sentiment. The S&P 500 is up more than 10% year to date. That said, the broad market index stumbled last month as concerns about persistent inflation put pressure on stocks.

These concerns were quickly allayed by new data and comments from Fed officials indicating that future rate hikes are unlikely.