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US Stocks Continue Positive Yield as Inflation Cools and Earnings Season Begins

The stock market continued its weeklong rally on Thursday, buoyed by signs of cooling inflation and stronger-than-expected earnings reports. The S&P 500 closed up 0.9%, the Dow Jones Industrial Average rose 0.1%, and the Nasdaq led gains with a 1.6% increase.

Wednesday’s drop in consumer inflation to a two-year low provided a boost to the markets and put pressure on the dollar. Additionally, the June reading of the Producer Price Index (PPI) came in at 0.1%, lower than expectations. Furthermore, the Labor Department reported an unexpected decline in the number of Americans filing new claims for unemployment benefits last week.

The easing of inflationary pressures could potentially prompt the Federal Reserve to reconsider its rate hike campaign. However, according to the CME FedWatch Tool, most traders still see a high likelihood (above 90%) of a rate increase in July.

The start of the earnings season also contributed to the positive market sentiment. Upbeat reports from PepsiCo and Delta Airlines set a positive tone, with the anticipation of earnings results from Wall Street banks like JPMorgan and Citigroup on Friday.