The S&P 500 advanced to a fresh record Thursday as investors shrugged off data showing higher US inflation, while European equities edged lower after the European Central Bank (ECB) held steady on monetary policy.

All eyes were on the May US consumer price reading, which showed the inflation rate accelerated to five percent for the 12 months ending May, the highest annual reading in 13 years.

Investors have been worried about US inflation for weeks, but largely took Thursday's reading in stride. All three major indices gained, and the S&P 500 finished at an all-time high.

"It's another case where we had another blockbuster inflation report and nobody cared," Karl Haeling of LBBW told AFP. "The market looked the other way."

The increase was driven largely by spikes in energy and used car prices, which analysts attributed to separate but temporary factors.

Art Hogan, chief market strategist at National Securities, noted that while the annual consumer price index topped expectations, the monthly gain slowed to 0.6 percent in May from 0.8 percent in April, which largely validates the Federal Reserve's stance that higher inflation will be transitory.

"We may be getting close to a peak and it will start to decelerate in the June, July timeframe," Hogan said.

Earlier, eurozone stocks slid after the ECB, as expected, held its interest rates steady and said it is too early to reduce economic stimulus measures.

ECB chief Christine Lagarde said it would be "too early and premature" to discuss tightening monetary policy, saying continued support was needed to cement the rebound.

Keeping the cheap money taps open throughout the pandemic crisis "remains essential to reduce uncertainty and bolster confidence," she told reporters.

Rabobank analyst Jane Foley said the ECB remained committed to very dovish policy settings despite the improved economic outlook.

By forgoing using thin summer trading conditions to lower stimulus purchases of bonds, Lagarde "clearly wanted to give a 'steady as she goes' message," Foley said.

Traders were also tracking the start of a summit of G7 wealthy nations, ahead of which the United States said it would buy 500 million Covid-19 vaccine doses to distribute among poorer nations.

Relations between Beijing and Washington were in focus, too, after US President Joe Biden's decision to revoke his predecessor Donald Trump's executive order against Chinese-owned mobile apps TikTok and WeChat.

It comes as commerce officials from the world's two biggest economies have held discussions on trade and investment links.

Joe Biden has arrived in England for the G7 summit this weekend and his first trip abroad since becoming US president
Joe Biden has arrived in England for the G7 summit this weekend and his first trip abroad since becoming US president AFP / Brendan Smialowski

New York - Dow: UP 0.1 percent at 34,466.24 (close)

New York - S&P 500: UP 0.5 percent at 4,239.18 (close)

New York - Nasdaq: UP 0.8 percent at 14,020.33 (close)

London - FTSE 100: UP 0.1 percent at 7,088.18 (close)

Frankfurt - DAX 30: DOWN 0.1 percent at 15,571.22 (close)

Paris - CAC 40: DOWN 0.3 percent at 6,546.49 (close)

EURO STOXX 50: FLAT at 4,096.07 (close)

Tokyo - Nikkei 225: UP 0.3 percent at 28,958.56 (close)

Hong Kong - Hang Seng Index: FLAT at 28,738.88 (close)

Shanghai - Composite: UP 0.5 percent at 3,610.86 (close)

Euro/dollar: DOWN at $1.2176 from $1.2180 at 2100 GMT

Pound/dollar: UP at $1.4177 from $1.4118

Euro/pound: DOWN at 85.87 pence from 86.27 pence

Dollar/yen: DOWN at 109.32 yen from 109.63 yen

Brent North Sea crude: UP 0.4 percent at $72.52 per barrel

West Texas Intermediate: UP 0.5 percent at $70.29 per barrel


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