May 16 (Reuters) - The benchmark S&P 500 and tech-heavy Nasdaq rose marginally on Thursday, setting fresh all-time highs a day after tepid inflation data bolstered hopes of interest-rate cuts.
All three major indexes notched record closes in the previous session after a smaller-than-expected rise in consumer inflation fueled optimism that inflation was easing after three months of hotter numbers.
The market is back to betting on two quarter-point interest rate cuts from the Federal Reserve this year, with traders seeing a 72.6% chance of the first reduction in September, according to the CME FedWatch Tool.
The Dow (.DJI), opens new tab was nearly flat after hitting a fresh intraday record high at open.
"At these levels, the market needs to take a breather and needs to rest," said Peter Cardillo, chief market economist at Spartan Capital Securities.
"So it's very possible that maybe not today, but we are approaching a level of consolidation, somewhat of a small pullback and a sideways movement."
Markets will now focus on several Fed officials expected to speak through the day, including Thomas Barkin, Loretta Mester, Raphael Bostic, Patrick Harker and Michael Barr.
New claims for state unemployment benefits fell 10,000 to a seasonally adjusted 222,000 for the week ended May 11, a Labor Department report showed, pointing to underlying strength in the labor market.
Among earnings updates, Walmart (WMT.N), opens new tab advanced nearly 6% after the retail giant raised its fiscal 2025 sales and profit forecast, betting on easing inflation to further boost demand for essentials.
That helped consumer staples (.SPLRCS), opens new tab lead sectoral advances with a 0.9% gain.
Deere (DE.N), opens new tab fell 2.5% after the farm equipment maker trimmed its annual profit forecast for the second time.
At 09:54 a.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab rose 0.76 points to 39,908.76, the S&P 500 (.SPX), opens new tab gained 5.07 points, or 0.10%, to 5,313.22 and the Nasdaq Composite (.IXIC), opens new tab gained 20.85 points, or 0.13%, to 16,764.01.
Most megacap growth and technology stocks climbed, with Nvidia (NVDA.O), opens new tab leading gains.
U.S.-listed shares of Chubb added 4% after Warren Buffett's Berkshire Hathaway (BRKa.N), opens new tab revealed a stake worth $6.7 billion in the insurer.
Popular meme stocks GameStop (GME.N), opens new tab and AMC Entertainment (AMC.N), opens new tab slid 16% and 8.9%, respectively.
They were set to extend Wednesday's losses that followed a two-day rally sparked by the return of "Roaring Kitty" Keith Gill, the central figure in the 2021 meme stock frenzy.
Declining issues outnumbered advancers by a 1.28-to-1 ratio on the NYSE and by a 1.35-to-1 ratio on Nasdaq.
The S&P 500 posted 31 new 52-week highs and no new lows, while the Nasdaq recorded 87 new highs and 24 new lows.
Reporting by Bansari Mayur and Shristi Achar A in Bengaluru; Editing by Arun Koyyur and Devika Syamnath
