(AP) -- Stocks were slightly higher Friday morning, as investors shrugged off the latest economic data that showed inflation accelerating in the U.S. economy. The market is on pace for its first weekly gain in three weeks.
The S&P 500 index was up 0.4% as of 10 a.m. Eastern. The Dow Jones Industrial Average was up 0.4% and the Nasdaq Composite was up 0.5%. The S&P 500 would close up 1.4% if the market remains at these levels.
Investors did not react harshly to hotter-than-expected inflation data. The Commerce Department said personal consumption expenditures, a measure of inflation used by the Federal Reserve, rose by 3.6% in April. Excluding volatile food and energy prices, inflation was still high at 3.1%, and well above the Federal Reserve's long-term target of inflation of around 2%.
Bond yields remained steady on the news, with the 10-year U.S. Treasury note trading at 1.59%, roughly where it's been all week.
The calm rise of the market this week, steady bond yields, and a lack of a reaction to the latest inflation data signals that investors are less worried about long-term inflation issues than they were a few weeks ago.
Most policymakers have said they expected some level of inflation as the U.S. economy recovers from the pandemic, helped by trillions of dollars of economic stimulus, however they expect the inflation to be temporary.
Investors will get additional guidance from Washington later Friday when President Biden unveils his $6 trillion budget. While Biden's budget is only a proposal, it would be the highest level of spending as a segment of the economy since World War II.
Democrats control both the House and Senate, and the Senate can pass budget-related items without needing the 60-vote threshold, so it's likely a good number of Biden's items will make it into the final version.
Electronics maker HP fell 7% after the company issued a weak full-year forecast to investors.