US Stocks Edge Closer to Record High as Inflation Cools

The US stock market is nearing an all-time high after recent signs that inflation is cooling down. The S&P 500 index has climbed 0.5% and is on track to break its record set last week. The Dow Jones Industrial Average was down 47 points, or 0.1%, as of 12:50 pm Eastern time, while the Nasdaq composite was 0.7% higher.

A report showed that wholesale inflation in the US rose 4.7% last month compared to a year earlier, which is lower than June's 5.5% rate. Economists had expected a slightly higher increase, and this trend could lead the Federal Reserve to hold off on interest rate hikes.

The prospect of no rate hike has traders betting on just a 34% chance that the Fed will raise rates at its next meeting in September, down from around 50% probability seen two days ago. Lower interest rates would help keep inflation under control but would intentionally slow down the economy and make borrowing more expensive.

Treasury yields sank in the bond market, which has eased pressure on stocks and other investments. Oil prices also eased back, helping to limit worries about inflation. The price for a barrel of Brent crude oil fell 1.5% to $87.67.