Dow Jones, S&P 500, Nasdaq Hit Record Highs Amid Rising Inflation, Jobless Claims

The Dow Jones Industrial Average surged to new record highs above 46,000, driven by strong gains in major industrial and tech stocks such as Tesla, Nvidia, and Micron Technology. This rally occurred despite inflation data showing the Consumer Price Index (CPI) rose 0.4% monthly and 2.9% annually—above expectations—but remained consistent with market forecasts, keeping hopes alive for a Federal Reserve rate cut. Initial jobless claims rose to their highest level since October 2021, signaling a softening labor market that has heightened expectations for multiple rate reductions before year-end, with traders pricing in over a 90% chance of a 25 basis point cut at the upcoming September 17 FOMC meeting. Market sentiment reflects a complex economic environment where inflation remains elevated above the Fed’s 2% target, but weakening employment data suggests the central bank will prioritize rate cuts to support growth. Despite inflation pressures, investors are optimistic about the Fed's easing stance, fueling a broad-based market rally including the S&P 500 and Nasdaq reaching all-time highs. Analysts and market participants anticipate that the Fed's decisions will balance these conflicting signals, with rate cuts seen as imminent given the current economic data.