Wall St soars as cooling inflation spurs bets of smaller rate hikes

  • US consumer prices rose slightly more than expected in Oct
  • Traders see more than 80% chance of a 50 bps hike in Dec
  • EV maker Rivian capitalizes on the most important thing, form
  • Stocks: Dow 2.5%, S&P 4%, Nasdaq 5.4%

Nov 10 (Reuters) – Wall Street’s major indexes rallied on Thursday, with the heavyweight Nasdaq leading gains, after data showed that consumer prices rose more slowly than expected in October, fueling hopes that the Fed may reduce interest rates. the growth of its future prices. .

Benchmark S&P 500 (.SPX) and Nasdaq (.IXIC) are set for the biggest gains since April 2020 when data showed strong signs yet inflation has slowed, with the annual rate below 8% for the first time. time in eight months.

“It’s very good news for the Fed’s future policy and shows that the Fed’s actions have been appropriate,” said Mike Zigmont, head of marketing and research at Harvest Volatility Management. “It takes off the table the risk that the Fed will have to expand and crash the economy.”

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The inflation data prompted traders to adjust their price bets, with the odds of a 50-point increase in December jumping to more than 80% from 52% before the data was released.

Other data showed the number of Americans filing new claims for unemployment benefits rose slightly last week, suggesting that job growth is slowing.

The CBOE volatility index (.VIX), also known as Wall Street’s fear gauge, fell to a two-month low of 23.4 points.

Wall Street’s major indexes have suffered heavy losses this year as investors fear that the U.S. central bank’s increased power to stem years of high inflation will cause the economy to collapse. The S&P 500 is still down 18.3% year to date, marking its best annual performance since 2008.

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Growth and technology-related stocks boosted markets on Thursday as Treasury yields fell following the data.

Market heavyweights including Tesla Inc ( TSLA.O ), Microsoft Corp ( MSFT.O ), Apple Inc ( AAPL.O ), Amazon.com Inc ( AMZN.O ), Meta Platforms Inc ( META.O ) and Nvidia Corp ( NVDA .O) rose between 6.0% and 10.1%.

A press report said Amazon is reviewing unprofitable businesses, including electronics, to cut costs. read more

At 10:43 am ET, the Dow Jones Industrial Average (.DJI) was up 820.97 points, or 2.52%, at 33,334.91, the S&P 500 (.SPX) was up 149.48 points, or 3.99%, at 3,898.05 the Nasdaq. The Composite (.IXIC) was up 553.42 points, or 5.35%, at 10,906.60.

The PHLX Housing index (.HGX) jumped 10.3% to its highest level in two months after being battered this year by worries about high housing prices.

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The Russell 2000 index of small-cap companies (.RUT) rose 5.1%.

Rivian Automotive Inc ( RIVN.O ) rose 13.8% after the electric car maker posted a smaller-than-expected loss, a surge in bookings and reaffirming its full-year production outlook.

Meanwhile, the Republicans came close to gaining a majority in the US House of Representatives while control of the Senate depended on several contests, two days after the Democrats blocked a “red wave” that was expected to win the mid-term elections.

Advances outnumbered the bearish by a ratio of 11.59-to-1 on the NYSE and by a ratio of 5.60-to-1 on the Nasdaq.

The S&P index recorded 13 new 52-week highs and no new lows, while the Nasdaq recorded 70 new highs and 93 new lows.

Shubham Batra, Bansari Mayur Kamdar, Devik Jain and Sruthi Shankar report in Bengaluru; Edited by Shounak Dasgupta

Our Standards: Thomson Reuters Trust Principles.

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