S&P 500, Nasdaq and Dow all hit record highs after encouraging inflation data

All three major U.S. stock indexes, the S&P 500, Nasdaq, and Dow, reached record highs after April's Consumer Price Index indicated a slight cooling in inflation, rising only 3.4% year-over-year, compared to 3.5% the previous month. This positive inflation report, coupled with weak April retail sales, raised investor hopes for potential Federal Reserve interest rate cuts later in the year.

The S&P 500 surpassed the 5,300 mark for the first time, while the Nasdaq and Dow also posted significant gains. Economists had anticipated this inflation rate, viewing it as a potential normalization following higher rates in previous months. Key inflation drivers included rising gasoline and shelter costs, while grocery prices saw a decline for the first time in a year.