The S&P 500 clambered back to a record high on Thursday, inching above a peak reached in early December, building on gains after President Trump reiterated his commitment to bring down oil prices — a major component of inflation.
The S&P 500 rose just 0.5 percent on Thursday, but the gain added to a winning streak that began more than a week ago with data that showed inflation slowing in December by more than economists had expected. With Thursday’s rise the index is up 4 percent in the first three weeks of the year.
The recent rally arrived after the market had languished for weeks, as investors worried about the inflationary impact of policies promised by Mr. Trump — in particular, new tariffs and a mass deportation program that could push up consumer prices and wages.
Wall Street was concerned that the resulting inflation would prompt the Federal Reserve to leave interest rates higher than previously expected, as it sought to keep consumer price gains under control. Higher interest rates raise the cost of borrowing for consumers and companies and typically weigh on valuations in the equity market.
But the release of new inflation data in recent weeks has eased those concerns, with investors receiving another boost on Thursday, when Mr. Trump, at the World Economic Forum in Davos, Switzerland, promised to “bring down the cost of oil.”
West Texas Intermediate crude oil fell over 1 percent on Thursday to $74.62 per barrel.
In the bond market, the two-year Treasury yield — which is sensitive to changes in interest rate expectations, which are in turn dependent on the path of inflation — nudged lower on Thursday.