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Stocks surged on Thursday after October’s consumer price index raised expectations that inflation had peaked.
The Dow Jones Industrial Average is up 820 points, or 2.5%. The S&P 500 was up 4% and the Nasdaq Composite was up 5.5%.
The Consumer Price Index, a broad measure of the cost of goods and services, rose 0.4% in the month, up 7.7% from a year ago. This was the lowest annual growth rate since January. Economists had expected increases of 0.6% and 7.9%, according to Dow Jones. Excluding volatile food and energy costs, the so-called core CPI rose 0.3% on a monthly basis and 6.3% on a yearly basis, also below expectations.
“It shows just how important and concerned the market is and if they can get some help here, they want to move on the CPI,” said John Briggs of NatWest. “This just brings up the idea of inflation peaking, the Fed peaking…the Fed will slow down and reach the peak rather than continuing to hike rates aggressively 75 basis points at a time.”
Government bond yields plummeted after the CPI report, with 10-year Treasury yields dropping more than 18 basis points to 3.946%, below the key 4% level. Yields on two-year US Treasuries fell more than 23 basis points to 4.395%.
Tech stocks, which were hit hardest this year by soaring inflation and interest rates, led the gains in early trading. NVIDIA When Tesla They increased by 7.5% and 5.7% respectively. Salesforce Jumped 7%. apple 5% increase.
Semiconductor stocks rise Ram Research When Applied Materials An increase of more than 5% each. KLA also he rose 3.7%.
Thursday’s advance rekindled a comeback rally that began in mid-October but stalled in recent weeks. This is an important resistance for the market.
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