Nov 14- Wall Street’s major stock indexes climbed on Tuesday as colder-than-expected inflation data reinforced expectations that the Federal Reserve is finished raising interest rates and may start raising them. reduce next year.
The tech-heavy S&P 500 (.SPX) and Nasdaq (.IXIC) were both at two-month highs after data showed U.S. consumer prices remained unchanged in October in a context of falling gasoline prices.
In the 12 months through October, the CPI rose 3.2% after rising 3.7% in September, while economists polled by Reuters had forecast a 3.3% year-on-year rise.
Core prices, which exclude the volatile food and energy components, rose 4.0 percent compared with economists’ estimate of a 4.1 percent increase.
“We’re pleased to see headline CPI and core CPI coming in below expectations. That tells us the Fed is done, that they don’t have any more business here,” said Thomas Hayes, chairman of the Fed. hedge fund Great Hill Capital in New York. York.
“That’s what the Fed was looking for: slowing inflation, slowing the job market and keeping the economy going at the same time.”
Following the data, traders erased bets that the Fed would raise borrowing costs further and bet on rate cuts starting in May. U.S. Treasury yields fell, with the two-year yield, which best reflects expectations for short-term interest rates, sliding to a two-week low.
This in turn sent mega-cap growth stocks such as Nvidia (NVDA.O), Alphabet (GOOGL.O), Amazon.com (AMZN.O) and Tesla (TSLA.O) up between 1.7% and 5% at the start of the session.The small-cap Russell 2000 Index (.RUT) jumped 3.3%.
Wall Street’s major indexes saw a strong rebound in November on expectations that U.S. interest rates were near their peak, even though Fed Chairman Jerome Powell last week left the door open to a new tightening.
Fed Vice Chairman for Supervision Michael Barr is expected to testify before the Senate Banking Committee, while investors will analyze comments from Cleveland Fed President Loretta Mester and the head of the Fed Chicago, Austan Goolsbee, later today.
The focus is also on U.S. lawmakers’ negotiations over a funding bill, as lawmakers face a weekend deadline to fund the federal government.
U.S. House Speaker Mike Johnson said Tuesday he believes the House will pass a short-term spending bill to avoid a partial government shutdown starting Saturday.
At 9:36 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 330.19 points, or 0.96%, at 34,668.06, the S&P 500 (.SPX) was up 60.77 points, or 1.38%, to 4,472.32, and the Nasdaq Composite (.IXIC) rose 256.49 points, or 1.86%, to 14,024.23.
Shares of Snap Inc (SNAP.N) jumped 9.2% following news that Amazon.com (AMZN.O) will allow Snapchat users in the United States to purchase certain products listed on the company e-commerce directly from the social media app.
Home Depot (HD.N) gained 5.3% after the American home improvement chain beat quarterly profit estimates. Fisker (FSR.N) slipped 17.3% after the electric vehicle startup cut its 2023 production forecast.
Advancing issues outnumbered declining issues by a ratio of 13.89 to 1 on the NYSE and 5.44 to 1 on the Nasdaq. The S&P recorded 31 new 52-week highs and no new lows, while the Nasdaq recorded 59 new highs and 45 new lows.
