S&P 500 steady ahead of inflation data

The S&P 500 posted a slight gain on Thursday as investors awaited fresh inflation data to gauge potential interest rate cuts by the Federal Reserve. The broad market index edged up 0.09% to close at 5,482.87, while the Nasdaq Composite rose 0.30% to 17,858.68. The Dow Jones Industrial Average added 36.26 points, or 0.09%, finishing at 39,164.06. However, semiconductor stocks struggled, with Micron falling over 7% following in-line fourth-quarter revenue guidance and Nvidia slipping 1.9%, raising concerns about the sustainability of the AI-driven market rally.

Market participants focused on May’s core personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge. Economists polled by Dow Jones expected core PCE to rise 0.1% month-over-month and 2.6% year-over-year. Traders hope the data will indicate easing inflation pressures, increasing the likelihood of a Fed rate cut later this year. According to LPL Financial’s Quincy Krosby, a disappointing PCE report could fuel stagflation concerns, while cooler-than-expected data may help stabilize markets as July approaches.

Several companies saw stock declines following earnings reports. Levi Strauss tumbled 15.4% after reporting disappointing quarterly revenue, while Walgreens Boots Alliance plunged over 22% after slashing its full-year outlook and posting lower-than-expected earnings. Analysts suggest the market may need to rebalance, allowing underperforming sectors to gain traction while mega-cap stocks adjust.