The S&P 500 closed at a record high Thursday, climbing above 7,800 during the session for the first time in the index's history before settling at 7,798.99, up 0.65% on the day. The gains extended to the Nasdaq Composite and the Dow Jones Industrial Average, capping a session driven largely by a government inflation report that came in softer than economists expected. U.S. markets do not open again until 9:30 a.m. ET, so the figures below reflect Thursday's closing levels carried into this morning's session.
The Nasdaq Composite rose 0.81% to 26,803.03, lifted by gains in Meta Platforms, Micron Technology and Netflix. The Dow Jones Industrial Average added a more modest 69.72 points, or 0.13%, to close at 53,839.99. The S&P 500 touched an intraday high of 7,816.70, the first time the index has traded above the 7,800 mark, and Thursday's close was its 27th record close of 2026.
A Fed-friendly inflation print
The rally followed the Bureau of Labor Statistics' July producer price index report, which showed prices for final demand were unchanged on the month, well below forecasts for an increase, even as the year-over-year rate held at a still-elevated 4.7%. The release came a day after a similarly mild consumer price index reading, and together the two reports chipped away at bets that the Federal Reserve will raise interest rates when it meets next month.
Fed funds futures pricing tied to the September meeting swung notably on the news, with the implied odds of a rate increase falling to roughly 35% from about 50% earlier in the week, according to trading desks tracking the contracts. Cheaper energy added to the mood: Brent crude futures fell more than 2% Thursday to settle near $87 a barrel, easing one of the inputs that has kept headline inflation stubborn for much of the year.
Rally broadens beyond megacaps
Strategists framed the move as evidence that the market's rally, long concentrated in a handful of mega-cap technology names, is starting to widen out.
Interest rate hike expectations have receded following the deceleration of inflation in both the CPI yesterday and the PPI today. That has resulted in a strong bid in stocks and bonds. We are seeing the early signs of the broadening rally returning.
Michael O'Rourke, chief market strategist, Jones Trading
O'Rourke pointed to the S&P 500 Equal Weight Index, the S&P MidCap 400 and the Russell 2000 as the likely beneficiaries of a less hawkish Fed, groups of stocks that have lagged the narrow, chip-and-cloud-driven leadership of the past two years. Economists at PNC Financial Services Group separately noted that the June and July producer-price reports together offer early evidence that inflation pressure may finally be easing, even if the Fed is unlikely to declare victory after just two soft prints.
Not every corner of the market shared in the optimism. Shares of AI chipmaker Cerebras Systems slid after a revenue miss reported Wednesday evening, a reminder that this year's rally still hinges heavily on the market's read of individual AI-infrastructure results even as the headline indexes climb. Oil markets, meanwhile, sent a mixed signal of their own: Thursday's drop in Brent and West Texas Intermediate reflected as much concern about softening global demand as it did relief for consumers, with the International Energy Agency and OPEC both trimming their 2026 demand outlooks this week.
The record still arrives against a backdrop of an unusually tight balancing act for the Fed. Inflation by both the CPI and PPI measures remains well above the central bank's 2% target even after Thursday's cooler prints, and policymakers have spent much of the summer weighing that stickiness against a labor market that has shown clearer signs of cooling. That tension is part of why futures pricing on the September decision has swung as much as it has over the past two weeks, moving from roughly even odds of a hike to the current one-in-three probability in the space of a few sessions.
With futures markets pointing to a roughly one-in-three chance of a September hike, attention now turns to the next several weeks of data — including the August employment report and another inflation reading — before the Fed's policy meeting. Traders will get their first live look at how Thursday's records hold up once cash equities open this morning; index futures were little changed in early trading, suggesting Wall Street may open close to where it left off.
