Index Notches Record Close After CPI Print

All three major U.S. equities indexes popped to record closing highs after the latest Consumer Price Index (CPI) report revealed a diminishing pace of price increases in April.

Wednesday’s inflation reading could help persuade the Federal Reserve to begin lowering interest rates over the next few months. In the wake of the encouraging data, the S&P 500 added 1.2%, boosting the benchmark index to its highest-ever close. The Nasdaq also reached a new record on Wednesday, jumping 1.4% as revitalized confidence on rate cuts helped drive tech sector outperformance. The Dow gained 0.9%—good enough for an all-time closing high and bringing the blue-chip index within striking distance of the 40,000-point level.

Shares of Super Micro Computer (SMCI), which manufactures high-performance servers and data storage solutions, led the S&P 500 higher, soaring 15.8%. Wednesday’s gains built on the previous session’s strong performance. However, Supermicro shares remain well below the peak reached in mid-March amid a frenzy of artificial intelligence (AI) enthusiasm.

In addition to underpinning a strong day for tech stocks, the positive inflation news helped boost shares of homebuilders, which also stand to benefit when borrowing costs move lower. D.R. Horton (DHI) shares added 6.5%, while shares of homebuilding peers Lennar (LEN) and PulteGroup (PHM) were up 5.2% and 5.0%, respectively.

Shares of Marketaxess Holdings (MKTX), which operates an electronic trading platform for fixed-income securities, gained 6.1%. The company topped earnings per share (EPS) estimates with its first-quarter results released last week.

Shares of Albemarle (ALB), the world’s largest lithium miner, fell 5.8%, marking the S&P 500’s weakest performance on Wednesday. The declines came after Canada-based mineral exploration firm Patriot Battery Metals (PMETF) announced it would not continue the development of a downstream lithium processing partnership with Albemarle. Patriot confirmed its memorandum of understanding (MOU) with Albemarle had expired and would not be extended.

Warner Bros Discovery (WBD) shares sank 4.2%. The entertainment giant reported a wider-than-expected net loss on a year-over-year decline in revenue when it reported first-quarter results last week. Warner Bros remains in negotiations with the National Basketball Association (NBA) over the league’s next broadcasting deal, and the outcome could impact revenues and costs for its TV division over the coming years.

Shares of Solventum (SOLV), the health care business that completed its spinoff from 3M (MMM) at the beginning of April, dropped 4.1%. In its first set of financial results as an independent company released last week, Solventum missed quarterly revenue estimates and said it expects little or no revenue growth for the full year. The company also opted not to declare a dividend or authorize a stock buyback as it prioritizes paying down its debt.