Wall Street’s major stock indexes were flat on Thursday as traders awaited a key inflation report that could influence the Federal Reserve’s next move on interest rates.
The S&P 500 had a gain of 0.1%. The benchmark index has held close to the all-time high it set last week.
The Nasdaq composite rose 0.3% and remains just below its all-time high. The Dow Jones Industrial Average closed 0.1% higher.
Gains in retailers and communications services companies helped offset losses in consumer goods makers, financial stocks and elsewhere in the market. Amazon.com rose 2.2% and Meta Platforms added 1.3%.
Walgreens Boosts Alliance sank 22.2% for the biggest drop in the S&P 500. It reported results that fell short of forecasts and lowered its outlook. The company said it could close hundreds more stores in the next three years.
Jeans maker Levi Strauss sank 15.4% after its latest quarterly revenue results fell short of analysts’ expectations, along with its current earnings forecast for the year.
Spice maker McCormick rose 4.3% for one of the biggest gains in the market after beating analysts’ revenue forecasts.
Chipmaker Micron Technology fell 7.1% after its latest forecast disappointed investors.
Treasury yields fell in the bond market. The yield on the 10-year Treasury, which influences interest rates on mortgages and other consumer loans, fell to 4.28% from 4.33% late Wednesday. The two-year Treasury yield fell to 4.71% from 4.75%.
It says an update from the government the American economy expanded with an annual rate of 1.4% from January to March. The figure is a slight revision from a previous estimate of 1.3%. It marks the slowest quarterly growth since spring 2022.
The report also supported data from previous economic reports showing that consumers are being squeezed by persistent inflation and high interest rates. According to the report, consumer spending, which has fueled economic growth, rose by just 1.5%, from an initial estimate of 2%.
The main takeaway from the report is that “the economy remained resilient in the first quarter, but private sector demand growth was cooling, led by more consumer prudence,” Gregory Daco, EY’s chief economist, said in a note.
A slowdown in consumer spending could help ease inflation further, but too much of a slowdown could result in a more painful blow to the economy. The Federal Reserve is struggling to rein in its efforts to tame inflation to its 2% target without slowing the economy enough to slip into a recession.
The stock market has been erratic this week ahead of Friday’s release of the government’s next influential inflation report. The personal consumption expenditure index, or PCE, is the Fed’s preferred measure of inflation.
Economists expect the report to show a modest easing of inflation to 2.6% in May, after a reading of 2.7% in April. This is down from the PCE peak of 7.1% in mid-2022. Other measures of inflation, including the consumer price index, have also eased significantly over the past two years.
Recent updates on inflation may affect the decision of the central bank when to start cutting interest rates, which remain at the highest level in more than 20 years and are having an impact around the world. Wall Street is betting that the central bank will start cutting interest rates at its September meeting.
The S&P 500 is on pace to post its fourth consecutive winning week. With one more trading day left this month, the index is up just under 4% for June and about 15% so far this year.
Still, the S&P 500 rose 4.97 points to 5,482.87. The Dow added 36.26 points to 39,164.06. The Nasdaq gained 53.53 points to close at 17,858.68.