US bourses rise on slowing inflation

US stocks jumped on Wednesday, with the S&P 500 hitting a new record on the back of statistics showing a decline in inflation in April, writes Business Insider. Key indices rose within 1.40%, the yield on 10-year treasuries fell to 4.334%.

The S&P 500 crossed the 5,300-point mark for the first time, driven by investor optimism that interest rates will fall this year. Inflation slowed to an annualized rate of 3.4% in April, which was in line with expectations, while the monthly rate was below forecasts at 0.3%.

Markets expect a rate cut by the end of the year. "The inflation news leaves room for a rate cut in the second half of the year," said Preston Caldwell, chief U.S. economist at Morningstar. "Our forecast is for two cuts in 2024, but three or four are also possible."

Retail sales came in below expectations, indicating the economy is slowing. A soft landing for the U.S. economy is not guaranteed, according to Jeffrey Roach, chief economist at LPL Financial. Markets will be looking for confirmation for a positive scenario, which the weak retail sales report did not provide.