Dow soars over 500 points as new data shows inflation continues to cool
By Krystal Hur, CNN
New York (CNN) — Stocks climbed on Tuesday as Wall Street cheered the inflation cooldown in the latest economic data for October.
The Dow rose 550 points, or 1.6%, in early afternoon trading. The S&P 500 gained 2.1%, on pace for its best day since January. The Nasdaq Composite added 2.4%, on track for its best day since April.
The Consumer Price Index rose 3.2% for the 12 months ended in October. That’s down from 3.7% the prior month, according to fresh data from the Bureau of Labor Statistics. Economists had predicted a 0.1% monthly increase and a 3.3% annual gain, according to Refinitiv estimates.
Core CPI, which excludes the volatile food and energy categories, rose 0.2% on a month-over-month basis. That brings the annual increase to 4%, the lowest annual increase since September 2021.
Treasury yields slipped following the report. The yield on the 10-year Treasury note was last trading at 4.44%.
The October Producer Price index, retail sales and building permits and housing starts data are also slated for release this week.
The Federal Reserve earlier this month held interest rates steady for a second consecutive meeting. Traders largely expect the central bank to repeat the move in December, when it will hold its last policy-setting meeting for the year.
“Today’s CPI validates that ‘wait-and-see’ approach,” said Brad Conger, deputy chief investment officer at Hirtle Callaghan & Co. “On the other hand, it will take a rather long series of this order of magnitude to give them confidence to ease policy.”
The powerful stock rally comes after a mixed performance on Monday, as investors largely seemed to shrug off Friday’s Moody’s Investors Service negative outlook for US credit.
Meanwhile, Home Depot shares gained 6.2% after the company beat Wall Street’s revenue and earnings expectations and said it is seeing strength in small improvement jobs, a key part of its business.
The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
