In a resounding response to a cooler-than-anticipated inflation data, United States stocks experienced a robust surge on Tuesday. Investors eagerly absorbed the latest data from the Bureau of Labor Statistics, revealing that consumer prices held steady in October, with core inflation marking its slowest pace since September 2021.
The Dow Jones Industrial Average (^DJI) led the charge, concluding the trading day with an impressive gain of over 450 points, equivalent to about 1.4%. Meanwhile, the tech-focused Nasdaq Composite (^IXIC) soared by 2.4%, and the benchmark S&P 500 (^GSPC) saw a notable increase of 1.9%. The small-cap Russell 2000 (^RUT) index outperformed them all, surging by a remarkable 5%, achieving its best closing performance in over a year.
Accompanying the stock rally, the 10-year Treasury yield (^TNX) experienced a substantial drop, plummeting nineteen basis points to settle at 4.44%. Simultaneously, the 30-year Treasury yield (^TYX) fell by twelve basis points, reaching a new level of just 4.62%.
The unexpected stability in consumer prices provided investors with a welcome reprieve and sparked optimism that the Federal Reserve might conclude its interest rate hikes. Market indicators maintained their upward momentum throughout the day, with the S&P 500 even reaching an intraday high during the course of trading.
A spectrum of consumer cyclical stocks and technology shares, both known to thrive in a weakened dollar environment, played a pivotal role in driving Tuesday’s gains. The Dow and the S&P also responded positively to the encouraging data, further fueling the market’s ascent.
To sum up, the substantial surge in US stocks for the day resonated as a collective sigh of relief among investors, propelled by the unanticipated stability revealed in the inflation data. This unexpected development signaled a potential shift in the market’s trajectory, instilling a renewed sense of confidence among market participants.
Source: Yahoo Finance
