By Shristi Achar A and Amruta Khandekar
(Reuters) - The Dow Jones industrials index hit its highest level in 2023 on Thursday, as Salesforce jumped on an upbeat profit forecast and a new report offered further evidence of easing inflation.
Salesforce jumped 8.5% as the cloud-based software firm raised its annual profit forecast and beat third-quarter estimates, benefiting from strong demand for its cloud and business products.
While the Dow rose to 35,725.11 points, crossing its intraday high of 35,679.13 points hit in August, all three main indexes were on course for their strongest November since 2020.
The S&P 500 and the tech-heavy Nasdaq were also poised for their biggest monthly percentage gain since July 2022, on signs of cooling price pressures.
The personal consumption expenditure (PCE) index - the Fed's preferred inflation gauge - showed inflation remained unchanged in October on a monthly basis, against economists' projections of a 0.1% increase.
Core inflation, which excludes volatile food and energy prices, rose 0.2% on a monthly basis, in line with estimates.
This led traders to held their bets the Federal Reserve will keep interest rates steady for three more meetings before starting to cut them in May.
"What we've seen in the PCE data today is just further evidence that inflation continues to move lower and it's been a trend that we've seen for most of this year," said Anthony Saglimbene, chief market strategist at Ameriprise Financial (NYSE:AMP) in Troy, Michigan.
"It confirms that the Fed is likely to stay on the sidelines next month, when they meet for their last policy meeting of the year."
Among the 11 major S&P 500 sectors, energy rose 1.8% and was the top gainer, tracking crude prices higher ahead of the outcome of an OPEC+ meeting. [O/R]
But most megacap stocks edged lower, with Tesla (NASDAQ:TSLA) down 1.4% and leading declines, keeping the S&P 500 and Nasdaq under pressure. Higher U.S. Treasury yields, which make returns on stocks less appealing, weighed on equities.
Mixed messaging from Fed officials have kept markets on edge in recent days.
Both San Francisco Fed President Mary Daly and Bank of New York President John Williams kept the door open to further tightening on Thursday.
Markets also assessed the weekly jobless claims, which showed initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 218,000 for the week ended Nov. 25, hinting at a softening labor market.
At 10:11 a.m. ET, the Dow Jones Industrial Average was up 249.82 points, or 0.71%, at 35,680.24, the S&P 500 was down 1.51 points, or 0.03%, at 4,549.07, and the Nasdaq Composite was down 55.69 points, or 0.39%, at 14,202.80.
Data cloud company Snowflake added 7.7% after it forecast fourth-quarter product revenue above Street estimates.
Pinterest (NYSE:PINS) and Snap Inc (NYSE:SNAP) rose 3.1% and 7.1% respectively, after Jefferies upgraded the social media firms to "buy" from "hold."
Advancing issues outnumbered decliners by a 1.26-to-1 ratio on the NYSE and by a 1.03-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and two new lows, while the Nasdaq recorded 35 new highs and 48 new lows.