The S&P 500 closed at a record high Thursday, up 0.65% to 7,798.99, after touching an intraday all-time high of 7,816.70. It was the index's 27th record close of the year. The Nasdaq Composite added 0.81% to 26,803.03, and the Dow rose 0.13% to 53,839.99.
Cooler producer prices fuel the rally
The Producer Price Index for final demand was unchanged in July, against economists' forecast of a 0.2% rise. Annual producer-price growth slowed to 4.7% from 5.5% in June. The Consumer Price Index rose just 0.1% for the month and 3.4% over the past year.
BofA still expects three more Fed hikes, arguing the disinflation trend remains incomplete. But traders put a 63% chance on the Fed holding rates steady in September, according to CME's FedWatch tool.
Communication services and chipmakers lead
Communication services led Thursday's gains, up 1.56%, followed by a 1.34% advance in real estate. Chipmakers Sandisk and Micron Technology surged 13.7% and 4.2% respectively.
Cisco Systems dropped 8.4% despite an upbeat revenue forecast that fell short of high expectations. Workday shares jumped 18% after Reuters reported that Silver Lake is in talks to acquire the company, potentially valuing it near $43 billion. Netflix climbed 5.4% after investor Bill Ackman disclosed a new stake in the streaming company. Tapestry shares plunged more than 16% on a muted revenue forecast.
Complacency risk creeps back
JPMorgan and CFRA recently flagged rising complacency risk; hedging demand now sits near multi-month lows. That's a warning sign after such a strong run, but the market keeps climbing.
One more inflation print lands before the Fed's September decision. That report will likely shape whether the central bank holds or hikes.
