Wall Street Close: Bond buying propels S&P 500 to fresh record top

Shares on the US bourses posted mild gains, despite the strong beat of US inflation figures, by the end of Thursday’s North American trading session.

The Fed’s groundwork to reject fears of sturdy prices could be held responsible for the limited market reaction to the key US Consumer Price Index (CPI). The headline US CPI marked the fastest jump since 2008 to 5.0% YoY while the Core CPI rallied to the highest in 30 years with a 3.8% figure.

On the other hand, the ECB revised up its GDP forecasts for 2021 and 2022 to 4.6% and 4.7% respectively while inflation is upwardly revised to 1.9% for 2021 and 1.5% for 2022. The bloc’s central bank matched wide market expectations of keeping the policy settings unchanged.

Amid these plays, S&P 500 Futures refreshed the record top with 4,249.74 before closing with a 0.47% daily gains, or 19.63 points upside, to 4,239.18. Dow Jones Industrial Average (DJI) and Nasdaq also posted mild gains on the day, adding 0.06% and 0.78% respectively to 34,466.24 and 14,020.33 in that order.

It’s worth noting that the US 10-year Treasury yields dropped to the fresh low since early March while the US dollar index snapped a two-day uptrend following the key data/events.

The stock-specifics suggest an upbeat earnings-backed rally in the shares of RH as well as Signet Jewelers, respectively up 16% and 14%. On the contrary, Nielsen dropped 4.7% on Morgan Stanley’s downgrade.

Given the recent news of an agreement over the US infrastructure spending, with an outlay of $1.2 trillion for eight years, the American equities may witness a positive close to the week. However, Friday’s Michigan Consumer Sentiment data and updates from the Group of Seven (G7) meeting will be the key to follow.