U.S. stock markets reached new all-time highs on Thursday, with the S&P 500 closing at 7,501.24, up 0.77%, and the Nasdaq gaining 0.88% to 26,635.22. The Dow Jones jumped 370 points to 50,063.46, recapturing the 50,000 mark for the first time since the Iran war began in February.
The rally came despite alarming producer-price data from across the globe. India's wholesale price index inflation exploded to 8.30% year-on-year in April, far exceeding the consensus forecast of 4.40%, with fuel costs jumping 24.71%. Japan's PPI surged 2.3% month-on-month, well above the 0.7% consensus. U.S. export prices also jumped 3.3%, beating the 1.1% estimate.
Central banks are watching closely. The European Central Bank is eager to see updated inflation data, with strong readings potentially cementing expectations of a June rate hike. The ECB is responding to the likelihood of higher inflation in 2026 driven by the U.S.-Iran conflict and its impact on energy markets.
UK Q1 GDP came in at 0.6% quarter-on-quarter, matching expectations, while March GDP beat at 0.3% month-on-month against a consensus of -0.1%. The mixed economic picture shows resilience in some areas but growing pressure from energy-driven inflation in others.
Equity markets staged a remarkable rally in April, pushing year-to-date returns into positive territory. The S&P 500 forward price-to-earnings ratio stood at 20.9 by late April, above the five-year average of 19.9 and the ten-year average of 18.9, raising valuation concerns among some analysts.