Stocks Edge Up as Worries Around Inflation Abate

U.S. stock indexes edged higher on Wednesday, although the Dow Jones Industrial Average fell back from a record high, as investors digested upbeat economic data and modestly lowered their forecasts for inflation.

The market has been on its heels over the last few weeks, as disappointing earnings from Apple and other tech giants, and the lackluster jobs report all fueled concerns about economic growth. But the markets pulled back in recent days and the Dow Jones Industrial Average on Tuesday notched its best week of the year.

Stocks edged up Thursday as investors grew more optimistic about the outlook for inflation, and as worries about U.S. economic growth abated.. Read more about is inflation good for stocks and let us know what you think.

U.S. stocks closed slightly higher on Wednesday as investors became increasingly confident that the Federal Reserve and other central banks will maintain their economic support despite rising inflation in the near term.

The S&P 500 rose 7.86 points, or 0.2 percent, to 4,195.99, with the broader market index posting a slight gain after Tuesday’s decline. The Nasdaq Composite rose 80.82 points, or 0.6%, to 13738.00. The Dow jumped 10.59 points, or less than 0.1%, to 34323.05. Wednesday marks the 125th anniversary of the founding of the Dow Jones Industrial Average.

Investors fear that rising inflation will force Fed officials to scale back monetary policy that helped markets recover from last year’s slump. Although officials have said in recent days that they may discuss austerity measures, they have stressed that there are no immediate plans to change policy.

All these signals from the Federal Reserve suggest that there is no urgency to reduce liquidity, he said.

Savvas Savuri,

Chief Economist at Toscafund Asset Management.

Growing confidence in the inflation outlook calmed markets, with

Volatility index Cboe

-The fear gauge on Wall Street, also known as the VIX, fell to $17.36 on Wednesday, down 7.9 percent.

Actions in

Urban Outfitters

climbed $3.51, or 10%, to $38.47 after the company reported profit for the latest quarter while buying continues to normalize.

It’s perhaps a little more optimism that things could return to what you might call normal or pre-Covid, said

Tom Heinlin,

National Investment Strategist at U.S. Bank Wealth Management. He said investors will continue to monitor whether people will return to businesses or malls once they reopen.

Actions related to memes have also increased, with

GameStop

by $33.13, or 15.8 percent, to $242.56.

AMC Entertainment

rose $3.15, or about 19%, to $19.56. The website of GameStop, a video game retailer, recently published a new page advertising non-playable tokens, leading to speculation that the company may be creating digital products owned by users.

from Workday

Sales in the first quarter were up 15%. The company also raised its forecast for 2022 as it sees continued demand for its cloud-based online services.

Investors also noted

Exxon Mobil Corp.

Shareholder vote that could affect the company’s carbon strategy in the coming years. The final results of the vote were not yet known Wednesday afternoon, but the company said the activist investor had won at least two seats on the board.

In bond markets, the yield on the 10-year Treasury note rose to 1.572% from 1.563% on Tuesday, ending a string of four-day losses. The yield rises when bond prices fall.

In Asia, the major benchmark indices closed with mixed momentum. The Shanghai Composite Index rose 0.3 percent, while South Korea’s Kospi fell 0.1 percent.

New Zealand’s central bank has indicated it may raise its benchmark interest rate in the second half of next year, making the country one of the first developed markets to reverse Covid-era interest rate cuts. Kiwi government bonds were off the mark, with the yield on the benchmark 10-year bond falling from 1.789 per cent to 1.901 per cent on Tuesday.

Fed officials say they have no immediate plans to change monetary policy.

Photo:

Justin Lane/EPA/Shutterstock

E-mail Caitlin Ostroff at [email protected] and Amber Burton at [email protected]

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