U.S. Stocks Close Higher Despite Inflation Data / Investors Weigh Inflation Data Against Economic Recovery

 U.S. stocks close higher as investors weigh inflation data

U.S. stocks closed higher on Tuesday as investors weighed the latest inflation data against the ongoing economic recovery. The S&P 500 rose 0.7%, the Dow Jones Industrial Average gained 0.5%, and the Nasdaq Composite added 1.2%.

The Labor Department reported that the Consumer Price Index rose 8.6% in May, the highest increase since 1981. The increase was driven by rising prices for food, energy, and shelter. However, investors were encouraged by the fact that the core CPI, which excludes food and energy prices, rose 6%, which was below expectations.

The Federal Reserve is expected to raise interest rates by 0.75 percentage points at its next meeting on June 14-15 in an effort to combat inflation. However, investors are concerned that the Fed's aggressive monetary policy could lead to a recession.

Despite the concerns about inflation and a potential recession, investors remain optimistic about the long-term prospects of the U.S. economy. The stock market is still up about 10% year-to-date, and corporate earnings are expected to grow at a healthy pace this year.

Other business news from June 3, 2023:

• Amazon reports strong earnings and revenue for the first quarter.
• Tesla reports record quarterly deliveries of electric vehicles.
• Walmart reports lower profit but higher sales for the first quarter.
• Target reports lower profit and sales for the first quarter.