The benchmark S&P 500 index touched 5,670.81 earlier in the session, after a fresh economic data eased fears of an abrupt slowdown in the US economy.
The latest report from the US Department of Commerce showed Retail sales unexpectedly rose in August after a decline in auto dealer revenue was offset by strength in online shopping, suggesting the economy was on solid footing for most of the third quarter.
“Expectations were pretty well entrenched ahead of today’s economic data and what they showed was generally a growth environment, but a relatively slow growth environment,” said Russell Price, chief economist at Ameriprise Financial Services in Troy, Michigan.
Price said the size of the cut could stoke inflation fears or increase concerns that the Fed is moving too slowly to prevent a recession.
“What we’re seeing in this afternoon’s trading is how we managed to break above the all-time high… because tomorrow someone is going to be disappointed,” he said. Dow Jones The Industrial Average fell 15.90 points, or 0.04%, to 41,606.18, the S&P 500 gained 1.49 points, or 0.03%, to 5,634.58 and the Nasdaq Composite Index The dollar gained 35.93 points, or 0.20%, to 17,628.06. Markets are pricing in a 65% chance that the Fed will cut borrowing costs by 50 basis points at the conclusion of its two-day meeting on Wednesday, according to CME’s FedWatch tool. Market expectations on the size of the cut have been volatile in recent days, with just a 34% chance of a 50-basis-point cut priced in as of last week.
MicrosoftThe 0.88% increase was the biggest boost for the S&P 500, as shares rose after the artificial intelligence leader’s board approved a new $60 billion share buyback program and raised its quarterly dividend by 10%.
The Dow Jones hit a record intraday high for the second day in a row. The Russell 2000 index, which tracks small-cap companies that investors believe are likely to benefit from a lower rate environment, outperformed all three major indexes and rose 0.74% on the session.
Energy, up 1.41%, was the best-performing of the 11 major S&P sectors, boosted by a rise in crude oil prices, while health care was the worst performer, down 1.01%.
Among other stocks that advanced, Intel gained 2.68% after signing Amazon.com’s cloud services unit as a customer to make custom artificial intelligence chips. Amazon.com shares advanced 1.08%.
Advancing stocks outnumbered declining stocks by a ratio of 1.55 to 1 on the New York Stock Exchange and Nasdaq, while advancing stocks outnumbered declining stocks by a ratio of 1.25 to 1.
The S&P 500 posted 48 new 52-week highs and no new lows, while the Nasdaq Composite posted 147 new highs and 68 new lows.
Volume on U.S. exchanges was 10.23 billion shares, compared with the 10.74 billion average for the full session over the past 20 trading days.
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