• US stocks soared on Wednesday, with the S&P 500 notching an all-time high.
• The benchmark index surpassed 5,300 for the first time after April inflation came in cooler than expected.
• Consumer prices rose 3.4% last month, slightly lower that the 3.5% increase in March.

US stocks surged on Wednesday, with the S&P 500 breaking its all-time record as traders took in cooling inflation numbers.

All three benchmark indexes rose, while bond yields ticked lower. The Dow Jones Industrial Average surged 350 points while the 10-year Treasury fell 10 basis points to 4.344%.

The benchmark S&P 500 rose past 5,300 for the first time ever as investors grow optimistic that the Federal Reserve is still on track to cut interest rates this year after April inflation numbers were softer than the prior month.

Consumer prices rose 3.4% year-over-year in April, according to data from the Labor Department, lower than the 3.5% increase in March. On a monthly basis, inflation rose 0.3% in April, less than 0.4% in March. 

Markets are anticipating one to three rate cuts by the end of 2024, while odds that the Fed won’t cut rates this year at all have been slashed in half, according to the CME FedWatch tool.

“Today’s inflation news keeps multiple rate cuts on the table for the second half 2024,” Preston Caldwell, the chief US economist at Morningstar said in a note on Wednesday. “Our base case is two cuts in 2024 (September and December) but three or four is not implausible with continued inflation progress in conjunction with weakening economic activity.”

Retail sales also came in softer than expected for the month of April, another sign the economy is cooling. Slower economic activity helps lower inflation, though it could also indicate a slowdown in economic growth.

“The ‘soft landing’ narrative is still a possibility but not a guarantee,” Jeffrey Roach, the chief economist of LPL Financial said in a note. “Markets will be looking for more confirmation and the weak retail sales report did not help.”

Here’s where US indexes stood at the 4:00 p.m. closing bell on Wednesday: 

Here’s what else is going on today:

In commodities, bonds, and crypto: 

• West Texas Intermediate crude oil rose 0.99% to $78.79 a barrel. Brent crude, the international benchmark, ticked higher 0.13% to $82.86 a barrel. 
• Gold climbed 1.21% to $2,3876.77 per ounce. 
• The 10-year Treasury yield dropped 10 basis points to 4.344%. 
• Bitcoin surged 6.82% to $65,667.