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S&P 500 gains slightly to wrap up 4th straight positive month, sits less than 1% from record high

The S&P 500 climbed slightly on Friday to close its fourth straight positive month amid growing optimism over the U.S. economic recovery.

The broad equity benchmark ended the session up 0.1% to 4,204.11, sitting just 0.8% from its record high. The Dow Jones Industrial Average gained 64.81 points to 34,529.45. The tech-heavy Nasdaq Composite inched up 0.1% to 13,748.74.

The blue-chip Dow and the S&P 500 advanced 0.9% and 1.2% this week, respectively, both breaking a two- week losing streak. The Nasdaq rose 2.1% to post its best weekly performance since April 9.

For the month of May, the 30-stock Dow and the S&P 500 gained 1.9% and 0.6%, respectively, posting their fourth up month in a row. The tech-heavy Nasdaq, however, suffered a 1.5% loss this month for its first negative month in seven.

Small-cap Russell 2000, which is more leveraged to the economic reopening, eked out a slight gain this month, posting their eighth straight positive month for the first time since 1995.

A key inflation indicator — the core personal consumption expenditures index — rose 3.1% in April, faster than expectations of a 2.9% increase but not as hot as many on Wall Street had feared. Meanwhile, the savings rate remained elevated at 14.9% last month, while consumer spending rose 0.5%, in line with estimates.

“This report puts the Fed in a really good place, inflation is up, but real yields are still low. This is basically the transitory sweet spot,” said Jamie Cox, managing partner at Harris Financial Group.

Salesforce shares popped more than 5% Friday to lead the gains in the Dow. The rally came after the software company’s first-quarter earnings beat Wall Street expectations on its top and bottom lines.

Meme stocks fueled by traders in Reddit’s WallStreetBets forum had another roller-roaster session Friday with AMC shooting up as much as 38% and closing the day down 1.5%. GameStop erased earlier gains and dropped 12.6%.

This week, investors also monitored the back-and-forth in Washington over a comprehensive infrastructure package that could further boost the economic recovery. Senate Republicans unveiled a $928 billion infrastructure counteroffer to President Joe Biden on Thursday. However, that’s well below Biden’s most recent proposal of $1.7 trillion.

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