Nov 14 (Reuters) – Lower-than-expected inflation data raised expectations that the U.S. Federal Reserve could complete its interest rate hike and begin cutting rates next year, leading to lower-than-expected rates on the wall on Tuesday. The city’s main stock index rose.
The S&P 500 Index (.SPX) and the tech-heavy Nasdaq Index (.IXIC) both fell to 2 after data showed U.S. consumer prices were flat in October as gasoline prices fell. It reached its highest price in months.
The CPI rose 3.2% in the 12 months to October, following a 3.7% rise in September, but economists polled by Reuters had expected a 3.3% rise from a year earlier.
Core prices, which exclude volatile food and energy factors, rose 4.0%, compared with the 4.1% rise expected by economists.
Thomas Hayes, chairman of hedge fund Great Hill Capital, said: “I’m pleased that both headline CPI and core CPI were lower than expected.”This means the Fed is done and there’s nothing left to do here.” “This shows that we have not done so.” yoke.
“This is what the Fed was looking for: something that would slow inflation, slow the labor market, and at the same time hold up the economy.”
The data prompted traders to dismiss expectations that the Fed would raise borrowing costs any further and begin betting on a rate cut by May.
U.S. Treasury yields fell, with the two-year bond yield, which best reflects short-term interest rate expectations, falling to its lowest level in two weeks.
As a result, large growth stocks such as Nvidia (NVDA.O), Alphabet (GOOGL.O), Amazon.com (AMZN.O), and Tesla (TSLA.O) rose 1.7-5 in early trading. %Rose.
The small-cap Russell 2000 index (.RUT) rose 3.3%.
Wall Street’s major indexes rallied strongly in November on expectations that U.S. interest rates are near their peak, even though Fed Chairman Jerome Powell last week left the door open for further tightening.
Michael Barr, the Fed’s vice chair for oversight, is scheduled to testify before the Senate Banking Committee, and investors will parse comments from Cleveland Fed President Loretta Mester and Chicago Fed President Austan Goolsby later in the day. .
Negotiations among lawmakers over the funding bill are also in focus as lawmakers face a weekend deadline for federal funding.
U.S. House Speaker Mike Johnson said Tuesday he thought the House would pass a short-term spending bill to avoid a partial government shutdown starting Saturday.
As of 9:36 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 330.19 points, or 0.96%, at 34,668.06, and the S&P 500 Index (.SPX) was up 60.77 points, or 1.38%, at 4,472.32. The Nasdaq index rose 330.19 points (0.96%) to 34,668.06. The Composite Stock Price Index (.IXIC) rose 256.49 points (1.86%) to 14,024.23.
Snap Inc. follows news that Amazon.com (AMZN.O) will allow U.S. Snapchat users to buy some products listed on the e-commerce company directly from the social media app. (SNAP.N) stock rose 9.2%.
Home Depot (HD.N) rose 5.3% after the U.S. home improvement chain beat quarterly profit expectations.
Fisker (FSR.N) fell 17.3% after the electric vehicle startup cut its 2023 production forecast.
Advancing issues outnumbered declining issues on the New York Stock Exchange by a ratio of 13.89 to 1 and on the Nasdaq by a ratio of 5.44 to 1.
The S&P index recorded 31 new 52-week highs and no new lows, while the Nasdaq recorded 59 new highs and 45 new lows.
Reporting by Sruthi Shankar and Amruta Khandekar in Bengaluru. Additional reporting by Ankika Biswas.Editing: Shinjini Ganguly
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