NEW YORK: Wall Street stocks surged on Thursday (Nov 10) and ended with steep gains, including a nearly 1,200-point jump for the Dow, as investors seized on data showing US inflation slowing to spark a rally.
The Dow Jones Industrial Average jumped 3.7% to finish at 33,715.37, while the broad-based S&P 500 jumped 5.54% to end at 3,956.37. The tech-rich Nasdaq Composite Index was the big winner, soaring a whopping 7.35% to 11,114.15.
“I don’t recall having ever seeing the Nasdaq being up 7% ever (and) I’ve been watching the markets for over 50 years,” Peter Cardillo of Spartan Capital Securities told AFP.
The Dow has now recovered about 17% from its closing low on Sept 30, and it remains down about 9% from its record high close in early January.
The gains came after a closely-watched government data report showed annual consumer price inflation eased to 7.7% n October, the lowest since January.
Even though inflation remains near the highest in decades, the slowdown gives hope that the Federal Reserve will be able to ease up on its aggressive interest rate hikes.
The US central bank has increased the benchmark lending rate six times this year – including four consecutive super-sized hikes – as it tries to quash demand and rein in inflation.
“This is a big deal,” said King Lip, chief strategist at Baker Avenue Asset Management in San Francisco. “We have been calling the peak of inflation for the last couple of months and just have been incredibly frustrated that it hasn’t shown up in the data. For the first time, it has actually shown up in the data.”
Cardillo said the CPI data is an indication that inflation “has peaked”.
“That’s what it’s all about,” he said, adding that with today’s rally “the bear market is over.”
Some investors urged caution that Thursday’s rally may be overdone.
“The market is – as it has been a few times this year – very eager to trade a ‘Fed pivot’ … but we think the market is getting a little ahead of itself based on one print,” said Zach Hill, head of portfolio management at Horizon Investments in Charlotte.
One-time Wall Street darlings tarnished in 2022’s bear market were among Thursday’s strongest performers, with Nvidia jumping about 14%, Meta Platforms climbing 10% and Alphabet rising 7.6%. – AFP, Reuters