December 9, 2022

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Dow Jones rises 700 points as new data raises hope that US inflation may be at its peak

Dow Jones rises 700 points as new data raises hope that US inflation may be at its peak

Stocks rose on Thursday after October’s reading of consumer prices raised hopes that inflation had peaked.

The Dow Jones Industrial Average jumped 764 points, or 2.3%. The S&P 500 jumped 3.7%, while the Nasdaq Composite rose 5%.

The Consumer Price Index, a broad measure of the costs of goods and services, rose only 0.4% for the month and 7.7% from last year. This was the lowest annual increase since January. Economists had expected increases of 0.6% and 7.9%, according to Dow Jones. Excluding volatile food and energy costs, core CPI rose 0.3% for the month and 6.3% year over year, also lower than expected.

“It definitely shows how much the markets are concerned, worried about and willing to act on the CPI if you get any kind of help here,” said John Briggs of NatWest. “It just brings up the idea of ​​peak inflation, peak Fed … the Fed is going to slow down and peak rather than continue to rise aggressively at 75 basis points as it does every time.”

Treasury returns It fell after the CPI report, with the 10-year Treasury yield falling more than 18 basis points to 3.946%, below the key 4% level. The two-year Treasury yield fell more than 23 basis points to 4.395%.

Technology stocks, which have been hardest hit this year with higher inflation and rates, led the gains in early trading. nvidia And the Tesla They rose 7.5% and 5.7%, respectively. sales force jumped 7%. apple 5% profit.

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Semiconductor stocks got a boost, with shares L research And the Applied materials All over 5%. The KLA also featured 3.7%.

Thursday’s advance revived the March of Return that began in mid-October but has stalled in recent weeks. The Dow touched its highest levels since August on Thursday and the S&P 500 approached the 3900 level, which was a major resistance for the market.