Traders work on the floor of the New York Stock Exchange during afternoon trading on June 3, 2024.
Michael M. Santiago | Getty Images
The S&P 500 pulled back Thursday, taking a breather after a rally that sent the benchmark to record levels.
The broad market index was 0.3% lower, while the Nasdaq Composite also shed 0.1%. The Dow Jones Industrial Average slipped 281 points, or 0.7%. The S&P 500 was up as much as 0.4% earlier in the day.
The S&P 500 and Nasdaq hit record levels this week, boosted by fresh data showing signs of inflation pressures cooling.
May’s producer price index fell 0.2% from the prior month. Economists polled by Dow Jones expected an increase of 0.1%. That report comes a day after May’s consumer price index rose less than expected last month.
Thursday’s data also follows a Federal Reserve policy decision. The Fed kept rates unchanged, but noted there has been progress made on the inflation front. That said, the central bank lowered its rate cut expectations for 2024 to one from its prior estimate of three.
“We can eliminate the possibility of an interest rate hike from here. That’s something in our framework that’s supportive for valuations across equities and credit,” said Zachary Hill, head of portfolio management at Horizon Investments. “Our baseline expectation right now is we’re going to continue to grind higher in an equity markets.”
Broadcom shares surged 13% after the chipmaker topped fiscal second-quarter expectations and announced a 10-for-1 stock split. On the other hand, Dave & Buster’s Entertainment shares dropped 11% after the company’s first-quarter revenue missed estimates.
Generac and Paramount Globalboth down 6%, led the S&P lower. The streaming service dipped after National Amusements killed its discussions with Skydance on a proposed merger. Salesforce, Amazon and Caterpillarrespectively down 2%, 2% and 1%, contributed to the Dow’s decline.
Correction: Economists polled by Dow Jones expected PPI to rise by 0.1%. A previous version mischaracterized the estimate.
