Stock market today: Wall Street holds near record highs as inflation cools again

NEW YORK (AP) — U.S. stocks are sticking near their records after the latest update on inflation bolstered Wall Street’s belief that some relief on interest rates will come as soon as September. The S&P 500 was drifting between small gains and losses in early trading Thursday. The Nasdaq composite edged up 0.1%, while the Dow Jones Industrial Average slipped 37 points, less than 0.1%. Treasury yields tumbled in the bond market as traders built bets for the Federal Reserve to soon begin lowering its main interest rate. The yield on the 10-year Treasury note fell to 4.51%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Wall Street shifted from small gains to losses early Thursday after some high-profile companies revealed some weaknesses in the just finished quarter.

Futures for the Dow Jones Industrial Average slipped 0.2% before the bell, while the S&P 500 fell 0.1%.

Delta tumbled more than 8% after it reported lagging profits. The Atlanta airline reported a second-quarter profit decline of 29% due to higher costs and discounting of base-level fares. Delta is also predicting a lower profit than Wall Street forecast for the third quarter.

Delta's results dragged other airlines lower, with United and American falling 4.5% and Southwest and JetBlue each losing 2.6%.

PepsiCo fell 2.2% after reporting stronger profits than Wall Street expected, but softened its expectations someone for organic revenue growth..

Costco jumped more than 3% after the warehouse club posted strong June sales and announced an increase in annual membership prices.

Markets have been topping records despite a slowing U.S. economy and a tightening squeeze on lower-income households.

Hopes that inflation is slowing enough for the Federal Reserve to deliver much-sought cuts to interest rates later this year are also driving buying enthusiasm.

Fed Chair Jerome Powell returned to Capitol Hill on Wednesday to give testimony about interest rates, where he echoed many of his comments from a day before. He said he was “not sending any signals” about when cuts to rates could arrive, but he pointed out the downsides of being too late on them.

“More good data would strengthen our confidence” and clear the way for a cut, Powell said.

Much of Wall Street is expecting the Fed to begin cutting its main interest rate in September, but traders have a long history of jumping the gun. Powell acknowledged a recent improvement in inflation but reiterated the Fed is not confident inflation is sustainably heading toward its goal of 2%.

On Thursday the U.S. government will release the latest monthly update on inflation. Economists believe Americans spent 3.1% more for food, airline tickets and other goods compared with June of last year. That would be a touch slower than May’s 3.3% inflation rate.

“With the Federal Reserve ... wanting to see ‘more good data,’ the U.S. inflation print will play a significant role in validating if markets are getting ahead of themselves in pricing for a rate cut as early as September this year,” Yeap Jun Rong of IG said in a commentary.

Also coming Thursday is the government's latest weekly data on jobless claims, which serve as a stand-in for layoffs. Though the job market has been broadly strong since the economy busted out of a short but sharp pandemic recession, some softness has begun to show.

In Tokyo, the Nikkei 225 jumped 0.9% to finish at 42,224.02, again surpassing its all-time high after closing at records on Tuesday and Wednesday.

Buying was strong for a wide range of shares, with electronics makers leading gains. Sony Group Corp. jumped 3.6% and Disco Corp., which makes precision tools, was up 3.4%. Electric components maker Murata Manufacturing gained 2.8%.

Elsewhere in Asia, the Hang Seng in Hong Kong climbed 2.1% to 17,832.33 and the Shanghai Composite index surged 1.1% to 2,970.39.

In Seoul, the Kospi advanced 0.8% to 2,891.35.

Australia’s S&P/ASX 200 rose 0.9% to 7,889.60. Taiwan’s Taiex advanced 1.6% as Taiwan Semiconductor Manufacturing Corp. jumped 3.4%.

TSMC’s U.S.-listed shares rose 3.5% on Wednesday after it said its revenue climbed nearly 33% in June from a year earlier. The company makes chips for Nvidia and others that have been driving the business world’s rush into artificial-intelligence technology.

In India, the Sensex was down 0.2%.

In Europe at midday, Germany’s DAX and London's FTSE 100 each advanced 0.2%, while the CAC 40 in Paris rose 0.3%.

U.S. benchmark crude oil gained 26 cents to $82.36 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, picked up 33 cents to $85.41 per barrel.

The U.S. dollar ticked down to 161.56 Japanese yen from 161.66 yen. The euro rose to $1.0851 from $1.0832.

The U.S. stock market vaulted to more all-time highs on Wednesday, led by big technology companies whose shares have been soaring thanks to the frenzy over artificial intelligence.

Hopes for cuts to interest rates also have pushed markets higher.

The S&P 500 jumped 1% and topped the 5,600 level for the first time, closing at 5,633.91.

The Nasdaq composite rallied 1.2% to 18,647.45, and the Dow industrials gained 1.1% to 39,721.36.