Stocks were mixed Thursday as investors digested trade and central bank news. The S&P 500 advanced 6 points to 2,999 and the Dow rallied 227 points to 27,088, with both benchmarks finishing at their respective record highs. The Nasdaq Composite bucked the upward trend, finishing down 0.1%.
Federal Reserve Chair Jerome Powell continued his semi-annual monetary policy testimony today before the Senate Banking Committee, suggesting that the Fed had room to ease amid a weakening relationship between inflation and unemployment. Yesterday, he reiterated plans to “act as appropriate to sustain the expansion” in the midst of “crosscurrents” posing increased risks to the U.S. economic outlook. The perceived dovish comments solidified expectations that the Fed will likely cut rates, spurring an early rally. Gains were capped, however, after President Trump tweeted that China is “letting us down” by not purchasing U.S. farm products, raising concerns around the trade negotiations.
On the data front, core CPI (excluding food and energy) increased 0.3% in June, the largest uptick in 18 months. Treasuries weakened following the stronger-than-anticipated inflation update, with the yield on the 10-year note up seven basis points to 2.13%. The yield on the 30-year bond rose eight basis points to 2.65% after an auction of the maturity drew soft demand.
Nine of 11 S&P 500 sectors finished in positive territory. Industrials paced the gains with Delta Air Lines advancing 1.4% after delivering record revenue during the last quarter. Financials also outperformed amid a jump in Treasury yields. UnitedHealth surged 5.4% after the Trump administration withdrew its proposed drug rebate overhaul.