Dow, S&P 500 Jump to All-Time Highs

US stocks rallied to new records Wednesday on hopes that inflation is heading back in the right direction.

• The S&P 500 jumped 61.47 points, or 1.2%, to 5,308.15, topping its prior all-time high set in March.
• The Dow Jones rose 349.89 points, or 0.9%, to an all-time high of 39,908.
• The Nasdaq composite rose 231.21 points, or 1.4%, to 16,742.39, adding to its record set a day earlier.

Treasury yields also eased after a report showing a slowdown in inflation boosted expectations for the Federal Reserve to cut interest rates this year.

Stocks that tend to benefit the most from lower interest rates helped lead the market, the AP reports. Real-estate stocks in the S&P 500 climbed 1.6%, while utility stocks rose 1.3%. Their dividend payments look better to investors when bonds are paying less in interest.Homebuilders were strong on hopes that cuts by the Fed would lead to easier mortgage rates, with Lennar and DR Horton both up at least 4%. Big Tech and other high-growth stocks also rode the wave of expectations for lower rates, and Nvidia's gain of 3.6% was the strongest force pushing the S&P 500 upward.

The optimism came from a report showing US consumers had to pay prices for gasoline, car insurance, and everything else in April that were 3.4% higher overall than a year earlier. While that's painful, it's not as bad as March's inflation rate of 3.5%. Perhaps more importantly, the slowdown was a relief after reports for the consumer price index, or CPI, earlier this year had consistently come in worse than expected. Traders are now forecasting a 93.3% probability that the Fed cuts its main interest rate at least once this year, according to data from CME Group.

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On Wall Street, Petco Health + Wellness was helped to lead the market after jumping 27.9%. It named Glenn Murphy, who is CEO of investment firm FIS Holdings, as its executive chairman. On the losing end were GameStop and AMC Entertainment, as momentum reversed following their jaw-dropping starts to the week. GameStop fell 18.9%, but it has still more than doubled for the week. AMC Entertainment fell 20% after it said it will issue nearly 23.3 million shares of its stock to exchange for $163.9 million in debt that it owes.

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