Stock Market Today: Wall Street is nearing its record high as markets prepare for an upcoming inflation report

NEW YORK (`) — Wall Street rose Wednesday as traders mapped out their final moves ahead of an inflation report that could show whether all the excitement catapulting stocks toward records is justified.

The S&P 500 gained 0.6%, coming within 0.3% of its all-time high from two years ago. The Dow Jones Industrial Average gained 0.5% and the Nasdaq Composite rose 0.8%.

Intuitive Surgical rose 10.3% after the maker of robotic surgical systems said it would report higher sales for the end of 2023 than analysts expected. Homebuilder Lennar rose 3.5% after it said it would provide cash to shareholders by increasing its dividend and authorizing a buyback of up to $5 billion of its own shares.

However, the market's focus is on Thursday, when the US government will release its latest monthly update on consumer inflation. A slowdown there from its summer 2022 peak has raised hopes that the Federal Reserve could cut interest rates significantly this year. This in turn has caused government bond yields in the bond market to fall and stock prices to rise.

Economists expect Thursday's report to show that prices paid by U.S. consumers were 3.2% higher in December than a year earlier, according to FactSet. That would be a slight acceleration from the 3.1% inflation rate in November. But even ignoring the impact of food and fuel prices, which can change quickly from month to month, economists believe underlying inflation trends have likely cooled further.

The Fed has noticed the slowdown in inflation, and it is suggested that interest rates could potentially be cut three times this year. That would be a drastic reversal after interest rates were raised sharply in the hope of slowing the economy and weighing on investment prices enough to curb high inflation.

However, many traders expect twice as many interest rate cuts. Critics say that's too optimistic and that the Fed is unlikely to cut interest rates that often unless there's a recession. If Thursday's inflation data turns out to be warmer than expected, it could dash those hopes and rattle the market.

The yield on 10-year government bonds has already fallen well below its peak of over 5% in October due to high hopes of interest rate cuts. It rose slightly on Wednesday, to 4.03% from 4.02% late Tuesday.

On Wall Street, Boeing shares stabilized after plunging the following week Air bubbles during flight one of his planes flying for Alaska Airlines. It rose 0.9%.

WD-40 rose 15.2% after reporting higher profit than analysts expected for its latest quarter.

The major companies in the S&P 500 are expected to begin reporting results for the final three months of 2023 on Friday. Delta Air Lines, JPMorgan Chase and UnitedHealth Group will be among the headliners that day.

Analysts expect a half-dozen stocks to account for most of the S&P 500's growth in the latest quarter. However, according to Bank of America strategists, trends are improving somewhat. They say 66% of companies are expected to see earnings growth, up from 64% in the third quarter.

“While risks remain, fundamentals are improving and analysts sound more optimistic than in the summer,” Ohsung Kwon and Savita Subramanian said in a BofA Global Research report.

Some of Wall Street's bigger losses on Wednesday came from stocks of oil and gas companies. Exxon Mobil fell 1% and Devon fell 1.9%.

Crude oil prices fell after giving up the previous day's gains. A barrel of benchmark U.S. oil fell 87 cents to $71.37, down about 3% for the week. Brent crude, the international standard, fell 79 cents to $76.80 a barrel. The price of natural gas also collapsed.

Overall, the S&P 500 rose 26.95 points to 4,783.45. The Dow rose 170.57 to 37,695.73 and the Nasdaq climbed 111.94 to 14,969.65.

In overseas stock markets, the Nikkei 225 in Tokyo rose 2% to its highest level since March 1990, as a weaker yen boosted exporters' stocks. Indices were mostly lower in the rest of Asia and mixed in Europe.

Among cryptocurrencies, Bitcoin hovered around $46,000 shortly after the Securities and Exchange Commission announced it would allow trading exchange-traded funds that hold real Bitcoinsrather than just related futures contracts.

The SEC appeared deeply divided over the decision. One commissioner called it an overdue move to give investors the opportunity to express their thoughts on Bitcoin, while another described it as an unsound measure that “has set us on a wayward path that could further undermine investor protection.”

A day earlier, Bitcoin experienced a wild rally after the SEC account on X, formerly known as Twitter, said it had approved such ETFs. However, shortly thereafter, the SEC said that no authorization had been granted and that her account had been compromised.

It was the latest tongue-in-cheek nonsense in a corner of the market that SEC Chairman Gary Gensler called the “Wild West” in 2021 because there weren't enough protections for investors back then.

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` writers Matt Ott and Zimo Zhong contributed.