By STAN CHOE, AP Business Writer
NEW YORK (AP) — The U.S. stock market is ticking toward a record on Thursday following the latest sign that inflation is getting less bad. Stocks also got a lift from easing oil prices in their latest yo-yo move.
The S&P 500 rose 0.4% and was near its record set last week. The Dow Jones Industrial Average was up 133 points, or 0.2%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.4% higher.
Wall Street relaxed a bit after a report showed prices at the U.S. wholesale level were 4.7% higher last month than a year earlier. While that’s still very high, it’s not as bad as June’s 5.5% inflation rate at the wholesale level, and it was slightly better than economists expected.
If inflation continues to trend that way, the Federal Reserve could decide to hold off on hikes to interest rates. Higher rates would help keep a lid on inflation, but they would do so by intentionally slowing the economy and making it more expensive for everyone to borrow money.
Fed officials are split on whether they should have already begun hiking interest rates. But Thursday’s report, following a similar update on inflation at the U.S. consumer level the day before, have traders now betting on just a 32% chance that the Fed will increase rates at its next meeting in September. That’s down from the roughly 50% probability seen two days ago, according to data from CME Group.
That helped push Treasury yields lower, which eases pressure on stocks and other investments. The yield on the 10-year Treasury fell to 4.64% from 4.68% late Wednesday and from 4.72% on Monday, though it’s still well above its 3.97% level from before the war with Iran sent oil and gasoline prices surging.
Oil prices eased back on Thursday, helping to limit worries about inflation. The price for a barrel of Brent crude oil fell 2.5% to $86.75.
It’s been swinging sharply recently and pinballed between $72 and $102 last month as hopes rise and fall that a deal in the war could allow oil tankers to freely exit the Middle East again and deliver crude worldwide.
On Wall Street, stocks of companies with big fuel bills climbed on hopes for less pressure on their costs. United Airlines added 1.4%, and cruise-operator Carnival rose 2%.
They helped offset a drop for Cisco Systems, which fell 9.4% even though the tech giant reported stronger profit and revenue for the latest quarter than Wall Street expected. Analysts said investors may be worried about its profit margins going forward, and its stock has been shaky through the summer amid worries that AI-related stocks in general shot too high.
In stock markets abroad, indexes were mixed in Europe and Asia. South Korea’s Kospi again had one of the world’s biggest moves and jumped 3.6%. Seoul has been home to the world’s sharpest swings for artificial-intelligence stocks because it’s dominated by two tech giants, Samsung Electronics and SK Hynix.
AP Business Writers Yuri Kageyama and Michelle Chapman contributed to this report.