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Stocks drift higher at open, S&P 500 trades just under record

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The S&P 500 was just below its all-time high on Wednesday as markets continued to trade in a tight range.

The 500 stock index rose 0.2%, hitting one point off its intraday record within the first two minutes of the regular trading session. The S&P 500 is now just 0.15% below its record high of 4,238.04 May 7th. The Nasdaq Composite was up 0.5% and the Dow Jones Industrial Average held steady around Tuesday’s closing prices.

Health, communications and technology stocks made positive stocks shortly after the session began, with drug maker Merck up 1.8%, Twitter 1.7% and Adobe 1.5%. Fox Corp. was the best performer in the S&P 500 with a plus of 2.3%.

The meme stock mania continued Wednesday, with day traders now turning their attention to Clover Health. The stock rose another 12% after an 85% rally on Tuesday amid explosive trading volumes. Clean Energy Fuels rose 30% on Wednesday with no apparent news.

Investors wait for the next inflation measurement to assess whether the higher price pressures are temporary as the economy continues to recover from the pandemic-induced recession.

“US stocks have been largely stuck in a range since mid-April and are unlikely to break out anytime soon,” said Edward Moya, senior market analyst at Oanda, in a press release. “Investors want to see how hot the price pressures will get and how much downtrend in stocks will happen once the Fed’s taper rage begins.”

The consumer price index for May is due to be published on Thursday. According to the Dow Jones, economists expect the consumer price index to increase by 4.7% year-on-year. In April the CPI rose 4.2% on an annual basis, the fastest increase since 2008.

Many on Wall Street believe the latest meme stock episode should be limited to a handful of names, in contrast to the GameStop trading frenzy in January that affected the broader stock market.

“Given the low risk of widespread contagion, we see the consequences of the recent short squeeze as
“Maneesh Deshpande, Global Head of Equity Derivatives Strategy at Barclays, said in a press release.” The current short squeeze is likely to be more localized because the number of stocks with high short interests has decreased dramatically.

On the data front, job vacancies rose to a new record high in April, with 9.3 million jobs posted online as the economy recovered.

– CNBC’s Tom Franck contributed to this story.

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Robert Dunfee