US stocks near record high as inflation cools

The U.S. stock market edged closer to a record high on Thursday, with inflation showing signs of cooling down. The S&P 500 gained 0.5 percent and edged towards its previous record set last week, while the Dow Jones Industrial Average slipped by 47 points, or 0.1 percent. The Nasdaq composite also rose 0.7 percent. Economists reported that wholesale prices in the U.S. had increased by 4.7 percent last month compared to a year ago, which, although still high, represented a slight improvement over the 5.5 percent inflation rate seen in June.

Economists had anticipated a higher inflation rate. If this trend persists, the Federal Reserve might refrain from raising interest rates, which are intended to curb inflation but also slow down the economy and increase borrowing costs. Fed officials remain divided on whether rate hikes should have begun earlier. However, Thursday's inflation data, along with a similar report on consumer inflation the day before, has led traders to believe there's only a 34 percent chance of a rate hike during the Fed's September meeting, down from the approximately 50 percent probability two days prior.

This could deter President Donald Trump, who has been advocating for lower interest rates. Bond yields dropped, easing pressure on stocks and other investments. The 10-year Treasury yield fell from 4.68 percent to 4.64 percent. Oil prices also declined, alleviating inflation concerns. Brent crude oil dropped by 1.5 percent to $87.67 per barrel.

Real estate stocks led the market, with AvalonBay Communities and Builders FirstSource both rising by 2 percent, and Fossil Group gaining 4.6 percent following better-than-expected quarterly results. The positive earnings reports have boosted Wall Street, as stocks generally follow corporate profits over the long term. Even Cisco Systems, which reported stronger-than-expected profit and revenue, saw a 9 percent drop due to concerns about future profit margins and its status as an AI-related stock.

Internationally, stock markets in Europe and Asia were mixed, with South Korea's Kospi index jumping 3.6 percent.