Wall Street’s major indexes rose on Tuesday Inflation data lower than expected This boosted expectations that the Federal Reserve has completed raising interest rates and may begin cutting interest rates next year.
The Dow Jones Industrial Average rose 550 points, or 1.6%, to 34,888, the Nasdaq rose 2.3% and the S&P 500 gained 2%.
Data showed that U.S. consumer prices remained unchanged in October as gasoline prices fell, with the S&P 500 and the technology-heavy Nasdaq hitting two-month highs.
In the 12 months to October, CPI rose 3.2% after rising 3.7% in September, while economists polled by Reuters had forecast a 3.3% annual increase.
Core prices, which exclude the volatile food and energy components, rose 4.0%, compared with economists’ expectations for a 4.1% rise.
Thomas Hayes, chairman of New Hedge Fund Great Hill Capital, said: “We were pleased to see both the overall Consumer Price Index (CPI) and the core Consumer Price Index (CPI) lower than expected. This tells us that the Fed has completed its task, There’s nothing more to do.” York.
“That’s what the Fed is looking for, a slowdown in inflation, a slowdown in the labor market and growth in the economy at the same time.”
After the data was released, traders wiped out bets that the Fed would further raise borrowing costs and instead bet on cutting interest rates starting in May.
U.S. Treasury yields fell, with the two-year yield, which best reflects expectations for short-term rates, falling to a two-week low.
That, in turn, pushed large-cap growth stocks like Nvidia, Alphabet, Amazon and Tesla up between 1.7% and 5% in early trading.
Wall Street’s major stock indexes rebounded strongly in November on expectations that U.S. interest rates are nearing a peak, although Fed Chairman Powell last week left the door open to further tightening.
Focus is also on U.S. lawmakers’ negotiations over an appropriations bill as they face a deadline to fund the federal government.
House Speaker Mike Johnson said Tuesday that he believes the House will pass a short-term spending bill to avert a partial government shutdown that begins Saturday.
Snap shares rose 9.2% following news that Amazon will allow U.S. Snapchat users to purchase some products listed by the e-commerce company directly from the social media app.
Home improvement chain Home Depot’s shares rose 5.3% after its quarterly profit beat estimates.
Electric vehicle startup Fisker significantly lowered its 2023 production forecast, sending its stock price down 17.3%.