Wall Street's main indexes notched record-high closes Thursday following gains in Tesla and Micron Technology, while U.S. inflation and jobless data fueled expectations that the Federal Reserve will cut interest rates this month.

U.S. consumer prices rose more than expected in August and the annual increase in inflation was the largest in seven months.

In a separate reading, initial jobless claims for the week ended September 6 stood at 263,000, at a near four-year high.

"Inflation has been sticky … Whether we would call it stagflation or not, people have different definitions of it. But certainly we are in a period that is unusual relative to the last several years, as the job market is slowing down considerably while inflation does not follow suit," said Atsi Sheth, Chief Credit Officer at Moody’s Ratings in New York.

Sheth predicted the Fed will reduce interest rates by 25 basis points next week, and another 25 basis points by year end.

Futures trading indicates traders are certain the Fed will cut rates by at least 25 basis points at its policy meeting next week, with about a 7% chance of a deeper 50 basis point cut. That follows a series of bleak labor market datasets and Wednesday's cooler-than-expected producer inflation reading.

Tesla climbed and helped the S&P 500 and Nasdaq hit record highs.

Micron Technology jumped after Citigroup raised its price target on the memory chipmaker to $175 from $150. The Philadelphia SE Semiconductor Index rose 0.9%, also hitting an all-time high.

Warner Bros Discovery surged after the Wall Street Journal reported that Paramount Skydance is preparing a majority cash bid for the struggling media company.

According to preliminary data, the S&P 500 gained 54.70 points, or 0.84%, to end at 6,586.74 points, while the Nasdaq Composite gained 153.54 points, or 0.70%, to 22,039.60. The Dow Jones Industrial Average rose 613.97 points, or 1.35%, to 46,104.89.

Centene jumped after the health insurer reaffirmed its annual profit forecast and said quality ratings for its Medicare plans were in line with expectations.

Oracle receded, giving back some of the prior session's 36% surge, which had added new fuel to Wall Street's AI rally.

Delta Airlines fell after the carrier reaffirmed its annual profit forecast.