NEW YORK (Reuters) – U.S. inflation slowed more than expected in July, raising hopes that the Federal Reserve would be less aggressive about raising interest rates. Wall Street surged Wednesday, with the Nasdaq more than 20% above its June low. .
After rising 1.3% in June, the US consumer price index remained flat last month as gasoline prices plummeted, according to the Labor Department. The CPI has risen 8.5% less than expected in the past 12 months, after his 9.1% rise in June. read more
The rise came on the first notable sign of relief for Americans who have seen inflation rise steadily. To confirm a bull market, the previous peak in November would have to be crossed.
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Federal Reserve futures traders now see only a 43.5% chance that the US central bank will raise rates by 75 basis points at its September meeting, compared with 68% before the data. A rate hike of 50 basis points is considered a 56.5% chance. read more
“For the market, it’s kind of a Goldilocks scenario at the moment because the labor market could hold up and inflation could start to come down,” said Sean Snyder, head of investment strategy at Citi. It is,” he said. US Wealth Management in New York.
But Snyder said a month of slowing inflation would not be enough for the Fed to send a completely clear signal.
The rise on Wall Street was broad, with all 11 sectors of the S&P 500 rising in a sea of green.growth stock (.IGX) rise above value (.IVX)Dow in transit (.DJT)small hat (.RUT) and semiconductor (.SOX) has also risen.
Dow Jones Industrial Average (.DJI) Up 535.1 points (1.63%) to 33,309.51, the S&P 500 (.SPX) rose 87.77 points (2.13%) to 4,210.24, while the Nasdaq Composite (.IXIC) Added 360.88 points to 12,854.81, or 2.89%.
The Nasdaq and S&P 500 posted their biggest one-day gains in two weeks and the Dow in three weeks. The S&P 500 closed at its highest level since early May.
“(Inflation) is still very high at 8.5%, but there is some optimism that it probably peaked in June,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab.
Frederick said Thursday’s July producer price data and next month’s August inflation and employment data could change course again for the Fed.
The Federal Reserve (Fed) has raised interest rates by 225 basis points since March despite concerns that a sharp rise in borrowing costs could plunge the US economy into recession.
Chicago Fed President Charles Evans says slowing inflation is the first ‘positive’ indicator of price pressures since the Fed began tightening policy, believing the Fed still has a lot to do. said. read more
After a rocky start to the year, the benchmark S&P 500 is up nearly 15% from its mid-June low. This is largely due to expectations that the Fed will be less hawkish than expected in its efforts to provide a soft landing for the economy as it fights for containment. inflation.
However, the S&P 500 is 12% below its all-time high in January and has been in a bear market since then.
CBOE Volatility Index (.VIX)Wall Street’s Gauge of Fear fell below the 20.00 level, closing at a more than four-month low.
High-growth and mega-cap technology stocks, whose valuations are vulnerable to higher bond yields, rose, while Treasury yields across the board plunged.Apple (AAPL.O)Alphabet Inc. (GOOGL.O)Amazon.com Inc. (AMZN.O) and Microsoft (MSFT.O) All rose by more than 2% each.
economically sensitive bank (.SPXBK) Goldman Sachs Group rose 2.7% (GS.N) and Morgan Stanley (MS.N) Each increased by about 3%.
“Banks are underperforming and are getting bids now,” said Thomas Hayes, managing member of Great Hill Capital, adding investors have been on the rally since June’s lows. He added that he was chasing down laggards that weren’t.
Tesla Inc. (TSLA.O) It climbed 3.9% after Elon Musk sold a $6.9 billion stake in the electric car maker to fund a potential Twitter deal. (TWTR.N) If he loses legal battle with social media platform. Twitter up 3.7%; read more
Meta Platforms Inc. (META.O) Shares soared 5.8% after Facebook’s parent company announced Tuesday it had raised $10 billion in its first-ever bond offering. read more
US exchanges traded 11.33 billion shares, averaging 10.98 billion shares across trading days over the last 20 days.
On the New York Stock Exchange, gainers outnumber losers by a ratio of 5.69 to 1. On the Nasdaq, gainers dominated with a ratio of 3.34 to 1.
The S&P 500 hit five 52-week highs and 29 new lows. The Nasdaq Composite posted 64 new highs and 54 new lows.
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Reported by Herbert Rush. Further reporting from Bangalore by Bansari Mayur Kamdar, Aniruddha Ghosh, Sruthi Shankar, Medha Singh and Karina D’Souza. Edited by Anil D’Silva, Shounak Dasgupta and Lisa Shumaker
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