The major U.S. index futures are currently pointing to a roughly flat open on Thursday, with stocks likely to show a lack of direction after surging to record highs in the previous session.

Traders may pause to assess the outlook for the markets following yesterday’s rally, which came as consumer prices rose by less than expected in the month of April.

The data added to recently renewed optimism about the Federal Reserve cutting interest rates in the coming months.

Potentially adding to the interest rate optimism, the Labor Department released a report this morning showing a pullback by initial jobless claims in the week ended May 11th.

The Labor Department said initial jobless claims slid to 222,000, a decrease of 10,000 from the previous week’s revised level of 232,000.

Economists had expected jobless claims to fall to 220,000 from the 231,000 originally reported for the previous week.

However, the positive sentiment may be partly offset by a separate Labor Department report showing U.S. import prices jumped by much more than expected in the month of April.

The report said import prices shot up by 0.9 percent in April after climbing by an upwardly revised 0.6 percent in March.

Economists had expected import prices to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

The annual rate of growth by import prices accelerated to 1.1 percent in April from 0.4 percent in March, reflecting the largest over-the-year increase since December 2022.

The Labor Department also said export prices climbed by 0.5 percent after inching up by a downwardly revised 0.1 percent in March.

Economists had expected export prices to climb by 0.4 percent compared to the 0.3 percent rise originally reported for the previous month.

Compared to the same month a year ago, export prices fell by 1.0 percent in April after tumbling by 1.4 percent in March.

With traders reacting positively to closely watched consumer price inflation data, stocks moved sharply higher during trading on Wednesday. The major averages added to Tuesday’s gains, setting new record closing highs.

The major averages saw further upside late in the session, reaching new highs for the day. The tech-heavy Nasdaq surged 231.21 points or 1.4 percent to 16,742.39, the S&P 500 shot up 61.47 points or 1.2 percent to 5,308.15 and the Dow jumped 349.89 points or 0.9 percent to 39,908.00.

The rally on Wall Street came following the release of a Labor Department report showing consumer prices in the U.S. rose by slightly less than expected in the month of April.

The Labor Department said its consumer price index increased by 0.3 percent in April after rising by 0.4 percent in March. Economists had expected consumer prices to climb by another 0.4 percent.

Excluding food and energy prices, core consumer prices still rose by 0.3 percent in April after climbing by 0.4 percent in March. The increase in core prices matched economist estimates.

The report also said the annual rate of consumer price growth slowed to 3.4 percent in April from 3.5 percent in March, in line with expectations.

The annual rate of core consumer price growth decelerated to 3.6 percent in April from 3.8 percent in March. The slowdown also matched estimates.

Following yesterday’s hotter-than-expected producer price inflation data, the report added to recently renewed optimism about the outlook for interest rates.

“The CPI print offered a modicum of hope that inflation is cooling, albeit slowly,” said Quincy Krosby, Chief Global Strategist for LPL Financial.

She added, “The Fed will certainly need a series of cooler reports for adjusting its rate easing timetable, but the CPI report suggests that the path towards 2% is a bit less bumpy.”

Meanwhile, the Commerce Department released a separate report showing retail sales in the U.S. unexpectedly came in flat in the month of April.

The Commerce Department said retail sales were virtually unchanged in April after climbing by a downwardly revised 0.6 percent in March.

Economists had expected retail sales to rise by 0.4 percent compared to the 0.7 percent increase originally reported for the previous month.

Excluding sales by motor vehicle and parts dealers, retail sales edged up by 0.2 percent in April after jumping by 0.9 percent in March. The uptick matched economist estimates.

Computer hardware stocks saw substantial strength on the day, driving the NYSE Arca Computer Hardware Index up by 4.1 percent to a record closing high.

Shares of Dell (NYSE:DELL) soared after Morgan Stanley raised its price target on the computer maker’s stock to $152 from $128, calling it the “best way to play” the AI infrastructure build-out.

Significant strength was also visible among housing stocks, as reflected by the 3.4 percent surge by the Philadelphia Housing Sector Index.

The index reached its best closing level in over a month even though a report from the National Association of Home Builders showed an unexpected slump by homebuilder confidence in May.

Semiconductor stocks also moved sharply higher over the course of the session, with the Philadelphia Semiconductor Index jumping by 2.9 percent to a two-month closing high.

Software, brokerage and commercial real estate stocks also saw considerable strength, while airline stocks were among the few groups that bucked the uptrend.