S&P 500 Trades Near Record High and Bond Yields Slip

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Stocks edged higher Wednesday as Wall Street prepared for the latest data on inflation that could influence monetary policy at the Federal Reserve.

The Dow Jones Industrial Average rose 4 points, or 0.01%, to 34,604, the S&P 500 gained 0.18%, just shy of an all-time intraday high, and the Nasdaq was up 0.44%.

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Stocks finished mostly higher Tuesday as traders looked for clues on what impact rising prices pressures may have on the Federal Reserve’s support for a U.S. economy recovering from the COVID-19 pandemic. 

The focus for traders remains on the Labor Department’s report Thursday on consumer prices and what it might mean for the Fed’s accommodative policies. The fear is that if the economy runs too hot and inflation runs too high the Fed may pare back on its monthly asset purchases and boost interest rates sooner than anticipated.

The Fed repeatedly has tried to assure markets that any spike in inflation resulting from the country’s economic recovery would be transitory.

The yield on the benchmark U.S. 10-year Treasury fell to 1.476%, below
1.5% for the first time since May 7. Back in March, yields rose to as high as 1.774%.

Oil prices in the U.S. rose above $70 a barrel early Wednesday.

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Bitcoin was rising nearly 6% to $34,890. Giving the world’s largest cryptocurrency a boost was the passing of a law in El Salvador that adopted Bitcoin as legal tender

Meme stocks, meanwhile, have continued to capture the imagination of retail investors and Wall Street pros alike.

GameStop  (GME) – Get Report, one of the top meme stocks favored by retail investors, is scheduled to report earnings after the closing bell Wednesday. It was slightly lower in trading Wednesday.

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Bed, Bath & Beyond  (BBBY) – Get Report, AMC Entertainment  (AMC) – Get Report and Clover Health  (CLOV) – Get Report also were on the move, along with Wendy’s  (WEN) – Get Report, which closed at an all-time high on Tuesday after it found favor among the increasingly influential army of Reddit investors.