S&P 500 Hits Record High as Inflation Cools and Earnings Remain Strong

What happened

The S&P 500 reached a fresh record high this week, driven by cooling inflation and strong earnings from AI-infrastructure companies. The Dow Jones closed at 53,732, down 0.56% for the week, while the S&P 500 finished up 0.36% at 7,785. Inflation eased to 3.4% in July, and the 10-year yield fell to 4.61%. However, the rally cooled on Friday as retail sales fell 0.6% and consumer sentiment dropped to 51.

Why it matters

Cooling inflation and strong AI earnings boost investor confidence, while weak consumer data suggests the Federal Reserve may hold rates steady. The drop in volatility and bond yields supports the rally, though a slowdown in consumer spending raises questions about economic momentum.