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S&P 500, Nasdaq at record highs as signs of cooling inflation boost rate-cut hopes By Investing.com

Investing.com – U.S. stocks rose Wednesday, after the widely-watched monthly consumer price index pointed to cooling inflation, offering hope that the Federal Reserve could cut interest rates this year.

At 10:30 ET (14:30 GMT), rose 140 points, or 0.4%, traded 30 points, or 0.6%, higher, and the rose 100 points, or 0.6%.

Cooling CPI helps tone

The overall rose 0.3% on the month in April, while the annual figure eased to 3.4%, dropping from 3.5% growth the previous month.

The , which strips out volatile food and energy prices, rose 0.3% versus March levels, while the annual core CPI inflation rate eased to 3.6% from 3.8% in March.

The core CPI inflation rate peaked at a 40-year-high 6.6% in September 2022.

While these numbers were still ahead of the Federal Reserve’s 2% medium term target, they do indicate a cooling and came as something of a relief given Tuesday’s hotter than expected .

Federal Reserve Chair Jerome Powell stated on Tuesday that inflation was taking its time coming back to target, but he also added that monetary policy was tight enough at current levels, prompting the market to cheer that the Fed will not hike interest rates any further in 2024.

Additionally, daa showed that overall retail sales were unchanged in April, trailing forecasts for a 0.4% gain, as consumers continued to struggle.

Traders see a 50.5% chance that the U.S. central bank will start cutting rates in September, according to the CME FedWatch Tool.

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Meme stock rally cools

So-called meme stocks saw more volatile trading Wednesday, with AMC Entertainment (NYSE:) stock slumping almost 30% after the cinema chain announced a debt-for-equity swap, which will see it issuing over 23 million shares.

GameStop (NYSE:) stock fell over 30%, with the video retailer handing back some of this week’s sizzling gains.

Before Wednesday, GameStop and AMC were up 179% and 135% this week, respectively.

Crude falls after IEA update

Crude prices retreated Wednesday after previous gains, with the IEA cutting its forecast for demand growth this year.

By 10:30 ET, the U.S. crude futures traded 0.6% lower at $77.58 a barrel, while the Brent contract dropped 0.6% to $81.86 per barrel.

The crude market had opened higher after data from the indicated on Tuesday that U.S. oil inventories shrank 3.1 million barrels last week.

If confirmed by the official data later Wednesday, this would suggest U.S. fuel demand was picking up with the advent of the travel-heavy summer season – a trend that could help tighten global crude supplies, even as U.S. production remains at record highs.

However, this optimism has evaporated after the International Energy Agency trimming its forecast for 2024 oil demand growth earlier Wednesday, in its .

The Paris-based energy watchdog lowered its growth outlook for this year by 140,000 barrels per day to 1.1 million bpd, largely citing weak demand in developed OECD nations.

(Ambar Warrick contributed to this article.)



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