Tuesday saw a spike in stocks, continuing their solid November gains, as Wall Street welcomed fresh data on U.S. inflation that gave rise to expectations that the Federal Reserve would soon end its rate-hiking campaign.
The Dow Jones Industrial Average closed at 34,827.70, up 489.83 points, or 1.43%. The S&P 500 gained 1.91% and ended the day at 4,495.70, momentarily breaking above the crucial 4,500 mark. It was the broad-market index’s strongest day since April. With a 2.37% increase, the Nasdaq Composite closed at 14,094.38.
Tuesday’s advances boosted the stock market’s already outstanding performance this month. November has seen gains of 5.4% for the Dow and 7.2% for the S&P 500, respectively. At 9.7%, the Nasdaq is poised to record its largest monthly increase since January.
While Dow Jones polled experts predicted a 0.1% month-over-month improvement, the CPI was flat last month. In line with expectations, the so-called core CPI—which excludes food and energy costs—rose at the slowest rate in the previous two years. This gave the market hope that the Federal Reserve might finally put an end to its rate-hiking campaign.
Globalt Investments portfolio manager Keith Buchanan expressed optimism that inflation is finally declining to the point where the Federal Reserve will be able to loosen its policy.
According to the CME FedWatch Tool, fed-funds futures pricing data following the report indicated rates are likely to stay unchanged at the upcoming Fed policy meeting.
After the modest inflation report, the yield on the 10-year Treasury fell below 4.5%, shocking investors by jumping over 5% in October.
Source (CNBC)
