Stocks rose to a record as cooler inflation lifted tech: Thursday recap

U.S. stocks climbed on Thursday and the S&P 500 closed at a record, ending above 7,800 for the first time. The index rose 0.7% to 7,798.99. Technology and communication shares did most of the lifting. The Nasdaq Composite added 0.8% to 26,803.03, while the Dow Jones Industrial Average, with less weight in fast-growing tech, gained just 0.1% to 53,839.99. For the week, the S&P 500 is up about 1.2%.

The sector board leaned green. Communication services led, up 2.1%, on strength in the large internet and streaming names. Real estate followed at 1.4%, and consumer staples rose 1.1%. Technology, the heaviest weight in the S&P 500, added 1.0%. Financials gained 0.6% and utilities 0.5%. Energy was the day’s holdout, close to flat as crude prices eased, though it remains the strongest sector over the past week. The laggards were shallow. Materials slipped 0.5%, the weakest group, while industrials and health care finished a hair below flat.

The day turned on inflation. Before the open, the Labor Department reported that its Producer Price Index for final demand was unchanged in July, below forecasts for a small increase, leaving wholesale prices up 4.7% over the past year. A drop in energy costs did much of the work: final-demand energy prices fell 3.1% on the month, and gasoline prices dropped 5.7%. Underneath the flat headline, prices excluding food, energy, and trade services rose 0.4%, a firmer core reading that kept the report from looking uniformly soft. Even so, the top-line number cooled worries that the Federal Reserve might tilt toward higher rates, and traders read it as room for the central bank to hold steady in September. They bought accordingly.

Semiconductors added their own push. Nvidia rose ahead of an earnings report due later this month, and the move rippled through the chip group and the wider technology tape. Goldman Sachs, in a note flagged across Wall Street, cautioned that expectations heading into that report now sit high, a reminder that a strong quarter is already partly priced in.

Beneath the surface, the advance was orderly. Small-cap stocks joined in without leading: the Russell 2000 gauge rose 0.3%, trailing the megacap-driven benchmarks. That is the mirror image of sessions earlier in the week, when smaller names outran large-caps on a bid in oil. All three major indexes now sit at or near record territory, and the Nasdaq has been the week’s standout among them. The Cboe Volatility Index, Wall Street’s fear gauge, settled at 14.63, a level that points to calm. The 10-year Treasury yield held at 4.70%, little changed as the inflation figures did nothing to unsettle the bond market.

The economic calendar has one more test this week. Retail sales for July and a first read on August consumer sentiment are both due Friday, with a figure on industrial production alongside them. Together they will fill in how households are spending and feeling as summer winds down. After that, attention turns to the Fed’s September meeting, where this week’s run of cooler inflation data will frame the debate.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.