The stock market continued its upward trend yesterday, with the S&P 500 index closing at a fresh record high above 5,600, amid a relatively calm trading session. The bulls’ triumph was driven by a mixture of optimism over the global economic recovery, solid corporate earnings, and a slightly diminished inflation concern. The benchmark index edged up 0.3% to 5,626.21, with the Dow Jones Industrial Average also reaching an all-time high of 34,565.77.

Traders breathed a collective sigh of relief as they braced themselves for the release of June’s Consumer Price Index (CPI) data, which is expected to provide a clearer picture of the US inflation landscape. The market consensus projects a 0.5% monthly increase in prices, which would translate to a year-over-year growth rate of 5.4%. This is still above the Federal Reserve’s 2% target, but investors are hopeful that the pace of inflation will moderate in the coming months.

The broad-based gain in the S&P 500 was led by the technology sector, with the Nasdaq Composite index rising 0.6% to 14,149.10. The tech-heavy index has been a key driver of the market’s recent rally, with many of the top-tier companies reporting strong earnings and guiding higher for the remainder of the year.

Meanwhile, the energy sector had a strong day, with oil prices rebounding from recent losses as investors grew more optimistic about the oil demand outlook. The price of West Texas Intermediate crude rose 2.4% to $72.19 per barrel.

In the earnings front, investors were impressed with the quarterly results from major companies such as Johnson & Johnson, Procter & Gamble, and 3M, which all reported better-than-expected profits. These solid reports bolstered confidence in the US economy and helped to push the market higher.

In addition, the Treasury Department’s auction of 10-year notes drew strong demand, which pushed yields lower and contributed to the positive sentiment. The 10-year yield fell to 1.55% from 1.58% earlier in the session.

Despite the upbeat mood, some investors remain cautious ahead of the June inflation data, which is expected to be released later today. The report will provide a crucial update on the pace of price growth and may influence the Federal Reserve’s decision on interest rates later this year.

“While the market is looking for a moderation in inflation, it’s essential to remember that the Fed is keenly focused on the underlying trends, not just the short-term fluctuations,” said John Paul, a senior strategist at Wells Fargo. “We expect the Fed to continue its accommodative stance for the foreseeable future, which should support the markets.”

In the options market, traders were positioning for a potential move in the S&P 500 index, with the buying activity in the 5,600-5,700 range indicative of a bullish outlook. The implied volatility in the options market remained relatively low, suggesting a high level of confidence in the market’s ability to continue its upward trajectory.

In conclusion, the S&P 500’s fresh record high is a testament to the market’s resilience and optimism about the global economy. While the release of June inflation data will undoubtedly be a key driver of market sentiment, investors are expecting the Fed to remain supportive of the market in the coming months. As such, the bulls are likely to remain in control, at least for the time being.