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S&P 500 Closes at Record High Even as Inflation Ticks Higher

The S&P 500 sets a record close as investors look past an uptick in consumer inflation. The Dow falls as the U.S. recommends a pause in the J&J COVID-19 vaccine.

The S&P 500 set a record close in mixed trading Tuesday as investors looked past an uptick in U.S. consumer inflation.

The Dow Jones Industrial Average declined after U.S. health officials recommended a pause in the use of Johnson & Johnson's  (JNJ) - Get Johnson & Johnson Report coronavirus vaccine following rare blood-clotting cases.

The S&P, which also set an intraday high, closed up 0.33% to 4,141, while the Dow fell 68 points, or 0.2%, to 33,677. 

The Nasdaq finished up 1.05% to 13,996.

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Both the Food and Drug Administration and the Centers for Disease Control and Prevention will stop using J&J's COVID-19 drug at federal vaccination sites after six people were found to have developed a rare blood clot issue within two weeks of receiving the single-dose shot.

The vaccine was developed by J&J's Janssen Pharmaceuticals division.

Shares of Johnson & Johnson declined 1.3% at $159.48 on Tuesday.

Consumer-price inflation in the U.S. during March increased at the fastest pace in 8 1/2 years as the economy began reopening from the pandemic.

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The CPI rose 0.6% in March, higher than economists' estimates, which called for an increase of 0.5%. On an annual basis, CPI rose 2.6% vs. expectations of 2.5%. 

Core CPI, which excludes volatile food and energy prices, rose 0.3% in March and 1.6% on the year, the Labor Department reported.

"After years of undershooting, the (Federal Reserve) wants inflation above the target for a while. Officials will call the increase in inflation 'transitory' and will push back hard against the idea that any sort of policy response is needed," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

"That idea will hold for a while, but if the increase in inflation persists, and -- especially -- if it is accompanied by faster wage growth, then the Fed’s line will become untenable. We continue to expect tapering by the end of this year and 50 basis points in hikes next year," Shepherdson added.

The yield on the 10-year U.S. Treasury fell on Tuesday to 1.63% after the government's auction of 30-year bonds was met with strong demand.

Earnings season kicks off Wednesday with reports from JPMorgan Chase  (JPM) - Get JP Morgan Chase & Co. Report, Wells Fargo  (WFC) - Get Wells Fargo & Company Report and Goldman Sachs Group  (GS) - Get Goldman Sachs Group Inc. (The) Report.

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Bitcoin on Tuesday jumped to an all-time high of more than $63,700 as the cryptocurrency sector prepares for this week's market debut of Coinbase Global  (COIN) - Get Coinbase Global Inc Report.

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