US Stocks Soar on Weaker Inflation and Falling Oil Prices

The US stock market reached new heights on Thursday following signs that inflation is decreasing. The S&P 500 climbed 0.7% and surpassed its previous record set last week, while the Dow Jones Industrial Average added 69 points, or 0.1%, and the Nasdaq composite gained 0.8%. Wall Street breathed a sigh of relief after a report showed wholesale prices rose 4.7% year-over-year, lower than June's 5.5% inflation rate.

This trend could lead the Federal Reserve to delay interest rate hikes, which would intentionally slow down the economy and make borrowing more expensive. However, Fed officials are divided on whether they should have already started raising rates. The latest report reduced the probability of a rate hike at the next meeting in September to 35%, down from 50% two days ago.

The decline in inflation expectations was also reflected in Treasury yields, which fell in the bond market, easing pressure on stocks and other investments. Oil prices dropped 2.1% to $87.07 per barrel, limiting concerns about inflation. The real-estate industry saw significant gains as lower interest rates made bonds less attractive and dividend-paying stocks more appealing.