The S&P 500 and Nasdaq reversed course to edge higher in volatile trading on Thursday after a clutch of upbeat retail and technology earnings encouraged investors to shrug off hawkish comments on inflation from a Federal Reserve policymaker.
Inflation remains front and center for investors, and stock markets slipped after New York Federal Reserve Bank President John Williams said inflation is becoming more broad based and that expectations for future price increases are rising.
The indexes recovered as retail earnings from Macy’s and Kohl’s on the back of upbeat reports from Walmart (NYSE:WMT) Inc and Target Corp (NYSE:TGT) earlier this week signaled robust consumer demand.
“Investors are worried that the Fed is behind the curve, that they’ll have to say that (inflation) is no longer transitory… that could be the reason for why the market is digesting some of these earlier gains,” said Sam Stovall, chief investment strategist of CFRA Research in New York.
