A better-than-expected CPI report cheers investors.

All week long, Wall Street was looking for, searching for, maybe even praying for a decent inflation report.

Traders' prayers were mostly answered. Yes, many inflation components are still too high, but at least the April Consumer Price Index report wasn't as bad as feared.

That is, the index didn't go up and fell slightly.

So, stocks shot up and hit their highest levels ever. If there was any disappointment, it was that the Dow Jones Industrial Average did not cross the 40,000 level for the first time.

The Dow did close up about 350 points, 0.9%, to 39,908. The Standard & Poor's 500 added 61 points, 1.2%, to 5,308, and the Nasdaq Composite Index added 231 points, 1.4%, to 16,742.

The Dow is now up 5.9% for the year. The S&P 500 is up 11.3%, and the Nasdaq is up 11.5%.

Of note, the Nasdaq-100 Index jumped 274 points, 1.5%, to 18,597. The close was a record, and the index hit its first 52-week high in 38 trading days.

The index, which heavily influenced by the largest tech stocks, is up 10.5% for the year. Nvidia NVDA added 3.6%.

Three big earnings reports to study

Retailing giant Walmart (WMT) reports fiscal first-quarter earnings before the open. The shares were down slightly on the day but are up 13.9% on the year.

Among other stocks reporting Thursday are agricultural equipment maker Deere (DE) and chip-equipment maker Applied Materials (AMAT) .

Deere is up 3.5% in 2024. Applied Materials has soared up 34% so far in 2024.An important report on housing starts is due from the Commerce Department.

More Economic Analysis:

Traders walk the floor at the New York Stock Exchange.
Spencer Platt/Getty Images

The indexes have weathered the disappointment that inflation is still above the Federal Reserve's 2% inflation rate goal. That's kept the central bank from cutting interest rates.

Meme stocks, which had soared earlier during the week, fell Wednesday. Gamestop (GME) , up 120% through Tuesday, fell 19% to $39.55. AMC Entertainment Holdings (AMC) fell 20% to $5.48.

But the CPI offered a little hope that inflation may be stabilizing.

Goldman Sachs still says rate cuts are coming. Doug Kass, who writes on TheStreet Pro, notes that Goldman Sachs says the Fed will cut rates this year, perhaps as early as July.

A broad rally

Wednesday's rally was quite broad, with 10 of 11 S&P 500 sectors higher, led by technology, up 2.3%. The Technology Select Sector SPDR Fund (XLK) added 2.5%.

The only sector not to finish with a gain on the day was consumer discretionary. The sector ended flat.

Interest rates slipped. The 10-year Treasury yield fell back to 4.344%, off from 4.441% on Tuesday.

Salesforce (CRM) was the top Dow stock, up 3.8%. Walt Disney (DIS) dropped 2.5%.

Super Micro Computer (SMCI) was the top S&P 500 stock, up 15.8% on the day.

Specialty-chemical maker Albemarle (ALB) was the laggard, down 5.9% to $127.49.

Oil prices were up slightly. West Texas Intermediate was up 0.8% to $78.63 a barrel. Crude is down 4% for the month.

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