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Tech Powers Stocks as Adobe Surges in Late Trading

Stocks closed at a fresh all-time high as tech rallied, with Treasury yields sinking on bets the Federal Reserve will cut rates this year amid signs of disinflation.

Equities rebounded after a brief drop, with the S&P 500 notching a fourth straight record — its 29th this year. In late trading, Adobe Inc. soared on a strong outlook. Treasuries climbed, with 10-year yields breaking below 4.3%. A $22 billion sale of US 30-year bonds saw strong demand.

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Bloomberg chart

The producer price index unexpectedly declined the most in seven months, indicating that inflationary pressures are moderating.

Several categories used to calculate the Fed’s preferred inflation measure — the personal consumption expenditures price index, were softer in May than a month earlier.

“The latest data in hand nudge the door a little wider open for the Fed to begin making an interest rate cut later this year,” said Bill Adams at Comerica Bank, which forecasts Fed reductions in September and December.

The S&P 500 topped 5,430. Tesla Inc. jumped after Elon Musk said shareholders backed his compensation package. Broadcom Inc. led a rally in chipmakers after announcing solid earnings and a 10-for-1 stock split. GameStop Corp. climbed as Keith Gill, known as “Roaring Kitty,” posted on X.

Treasury 10-year yields fell seven basis points to 4.24%. The European Union’s bonds got hit as bets they would soon be added to key sovereign benchmarks received a blow, undermining the bloc’s efforts to broaden the appeal of its debt. Heightened political risk in France drove the premium on the nation’s 10-year bonds to the widest since 2017 over German peers.

A historically strong start to the year for the US stock market should continue into the second half of 2024, according to JPMorgan Chase & Co.’s asset management division.