Stocks eased off of early gains, but still edged higher in afternoon trading on Wall Street Wednesday after the latest report of surging prices appeared to keep the Federal Reserve on track to raise interest rates later this year.
The S&P 500 rose 0.3% as of 2:23 p.m. Eastern. The Dow Jones Industrial Average rose 5 points, or less than 0.1%, to 36,258 and the Nasdaq rose 0.4%.
The modest gains were led by technology stocks, which have been choppy as investors shift money in anticipation of higher interest rates that tend to make the pricey sector less attractive. Microsoft rose 1.3% and chipmaker Nvidia rose 0.8%.
A mix of retailers and other companies that rely on direct consumer spending, such as auto companies, also made solid gains. Nike rose 1%.
Health care companies fell. Biogen slid 7.2% for the biggest drop in the S&P 500 on news that Medicare is limiting coverage of the biopharmaceutical company’s $28,000-a-year Alzheimer’s drug whose benefits have been widely questioned.
Bond yields were mostly stable. The yield on the 10-year Treasury fell to 1.73% from 1.74% late Tuesday.
Wall Street has been closely watching rising inflation to gauge the impact on businesses and consumers, as well as on the Fed's plan to trim its support for the economy and markets.
The Labor Department on Wednesday said consumer prices jumped 7% last month, its fastest year-over-year pace in nearly four decades, but in line with economists’ forecasts. The sharp rise comes a day after Fed Chair Jerome Powell told Congress that the central bank stands ready to raise rates to fight inflation.
The central bank is trimming bond purchases that helped keep interest rates low throughout the virus pandemic. Investors are closely watching to see just how soon the Fed will start raising...
