Stock market today: Wall Street ends higher, propelling the Nasdaq to a record level

NEW YORK (AP) Stocks finished higher on Wall Street, propelling the Nasdaq Composite Index to another record high. The S&P 500 rose 0.5% and is just below its own all-time high. The Dow Jones Industrial Average added 0.3%. The Nasdaq Composite Index rose 0.8%. Several meme stocks rose, including GameStop and AMC Entertainment, echoing the social media frenzy of three years ago. Treasury yields fell slightly in the bond market following a mixed report on wholesale inflation. Markets will be even more focused on the government's report, expected Wednesday morning, on consumer price inflation.

THIS IS A LATEST UPDATE. Earlier AP story follows below.

NEW YORK (AP) Stocks drifted higher Tuesday afternoon on Wall Street, leaving the market hovering just below the record high it set in late March.

The S&P 500 rose 0.3% and is just below its record high. The Dow Jones Industrial Average rose 99 points, or 0.3% to 39,531 as of 2:39 p.m. Eastern Time. The Nasdaq Composite Index rose 0.6%.

Several meme stocks, including GameStop and AMC Entertainment, have soared in a revival of the social media frenzy of three years ago. GameStop jumped 54.6% and AMC jumped 34.3%. Both stocks gave up most of their gains from earlier in the day.

An inflation update showed wholesale prices remain stubbornly high, before many price changes are passed on to consumers. The latest producer price index showed inflation rose sharply in April. The report also included a downward revision for the March reading. The report is the first of two big inflation updates this week that are being closely watched by Wall Street.

Inflationary pressures in the U.S. economy remain significant and the momentum built over the past several years continues, said Bill Adams, chief economist at Comerica Bank. At the margin, the Fed will view the April PPI report as another reason to slow the decline in interest rates.

Bond yields have fallen slightly. The 10-year Treasury yield fell to 4.45% from 4.49% Monday evening. The yield on the two-year Treasury note, which more closely tracks expectations for the Federal Reserve's actions, fell to 4.82% from 4.86%.

The biggest test for markets will come on Wednesday, when the United States releases its monthly update on consumer prices, or the inflation faced by households. Economists expect the consumer price index to fall to 3.4% in April on an annual basis. The inflation rate has risen in 2024, raising concerns that the Fed will struggle to control inflation to meet its 2% target.

Investors have lowered their expectations for the speed and frequency of interest rate cuts this year as inflation remains higher than expected. Traders are betting on one or two rate cuts this year, according to CME Group data.

Wall Street still hopes the Fed can achieve its soft landing, where high interest rates help curb inflation without slowing the economy into a recession. The economy remains strong, but consumers could show signs of fatigue under the weight of stubborn inflation. Economists expect the retail sales report released Wednesday to show that consumer spending slowed in April, just as it has in recent months.

The latest round of earnings reports and corporate forecasts from retailers also show consumers are struggling. Low-income households are particularly strained.

Fed Chairman Jerome Powell reiterated Tuesday during a roundtable in Amsterdam that the central bank would likely not raise its key interest rate to respond to stubborn inflation. He also said his confidence in slowing inflation is not as high as it was because price increases were persistent during the first three months of this year.

Earnings were a bright spot for markets, helping to support gains in major indexes in May after a difficult April. S&P 500 companies are mostly done with their latest results, which show an overall profit gain of 5.3%.

Stocks were mainly higher in Europe and Asia.

Chinese markets fell following US plans to increase tariffs on imports from China.