NEW YORK: Wall Street stocks mostly climbed on Wednesday (May10) as better inflation data offset worries about stalled talks between political leaders that have raised fears of a US default.
Indices were choppy during the session, as investors digested the positive inflation print with concerns about the looming debt ceiling.
The Dow Jones Industrial Average fell 30.48 points, or 0.09%, to 33,531.33; the S&P 500 gained 18.47 points, or 0.45%, at 4,137.64; and the Nasdaq Composite added 126.89 points, or 1.04%, at 12,306.44.
The consumer price index, a key inflation gauge, rose 4.9% from a year ago in April, just slightly lower than March's 5% figure.
While the report showed that inflation was still well above the Federal Reserve’s (Fed) target, analysts said the improvement may be good enough to halt additional rate increases.
“Markets reacted positively because they saw the inflation data as a small positive,“ said Michael Harris, president at hedge fund Quest Partners LLC. “The Fed is in a pause now. They’ve done their last rate hike and they’re going to wait and see for the next couple of months.”
But the debt ceiling impasse is becoming more of a worry to investors, said FHN Financial’s Chris Low, noting that “the politics make compromise even more difficult to achieve”.
Kevin W. Philip, a partner at investment adviser Bel Air, said: “The CPI is indicating some sort of relief in inflationary pressure. That would mean the Fed would be toward the end or already at the end of its interest rate cycle, and growth companies are most heavily affected by higher interest rates.”
Among individual companies, Google parent Alphabet shot up 4% after it showcased the company's Bard artificial intelligence program at its annual developers conference, parrying efforts by rival Microsoft.
Airbnb slid 10.9% on disappointment over the travel platform's second-quarter outlook.
Icahn Enterprises plunged 15.1% after it disclosed that it was contacted by Justice Department officials earlier this month for information about its corporate governance and securities offerings. This came just after short selling firm Hindenburg Research criticized the business.– AFP, Reuters
