On Wednesday, the S&P 500 Index (SPX) and Nasdaq 100 Index (NDX) both rose to new intraday highs as US CPI data for April showed core inflation cooling down for the first time in six months, strengthening people's bets that the Federal Reserve will cut interest rates as early as September. Meanwhile, retail sales in the US stagnated in April, and the increase in the previous two months was revised downward.

CIBC Private Wealth analyst Gary Pzegeo said, “The market is satisfied with the CPI data, and the news of core inflation is better than expected. The consumer sector, which was previously popular, has also slowed down. In summary, this supports the Federal Reserve's interest rate cut in the fall.”

Tom Essaye, founder of research firm Sevens Report, said that overall, the data shows that there is still work to be done on inflation, but most importantly, it reminds investors that a fall in inflation is still taking place — which will support the stock market.

Glenmede's chief private wealth investor Jason Pride said the CPI report was “a step in the right direction,” but before the Fed gets too excited about upcoming interest rate cuts, we need to see more evidence of inflation mitigation. He said, “This has indeed allayed some concerns that the Fed may not cut interest rates this year, but this does not mean that the Fed will cut interest rates immediately. Late summer/fall is still the most likely time for the Federal Reserve to begin its interest rate cut plan, but the next few CPI reports will be carefully analyzed to determine whether this schedule is still viable.”

The latest rise in US stocks has prompted at least one Wall Street investment bank to raise its target price.

Bank of Montreal Capital Markets (BMO Capital Markets) strategist Brian Belski said in a report to clients on Wednesday that he raised the year-end target for the S&P 500 index by 10% from 5,100 points to 5,600 points.

According to the CNBC Market Strategy Survey (Market Strategy Survey), this new target price is about 6.7% higher than Tuesday's closing point, and is also the highest among major Wall Street analysts.

Belski said in the report, “In late February, we decided to set the target price for the 2024 S&P 500 index at 5,100 points because we believe that considering that the index has rebounded sharply from the low of October 23 last year, the market has gone a little too far and too fast. But now that about three months have passed since this forecast report, we have clearly realized that we have underestimated the strength of the upward momentum in the market.”

Comparing this year to the market rebound in 2021 and 2023, Belski said, “Historical performance patterns suggest that the S&P 500 index will continue to rise considering the level of performance from year to date. Although we still expect a larger pullback at some point, it is likely that it will eventually reach a much higher level than we previously anticipated, which means that the rebound after the pullback will begin on a higher basis.”