Rate-sensitive tech stocks rose strongly: Tesla (+7.4%), Microsoft (+8.2%), Apple (+8.9%), Amazon.com (+12.1%), Meta Platforms (+10.2%) and Nvidia (+14.3%).
The CBOE Volatility Index, also known as the Wall Street Fear Gauge, fell to a nearly two-month low of 23.75 points.
The close revealed that the Dow Jones Industrial Average soared 3.7% to 33,715.37, the S&P 500 rose 5.4% to 3,952.25, and the Nasdaq Composite soared 7.3% to 11,114.15.
What motivated this important rise in the main indices on Wall Street was that the CPI in the United States continued to slow down and registered a year-on-year rate of 7.7% in Octoberhalf a percentage point less than the previous month, and a monthly variation of 0.4%.
Thus, inflation is at its lowest since January this year. Thus, the spikes in prices that impacted the US economy this year and reached 9% in June – the highest in 40 years – are beginning to recede.
With this inflation report, projections hold that the Fed is on track for a 0.5 point rate hike in December. It is worth noting that central bank officials signaled a desire to moderate the pace of interest rate increases.
What the analysts said
“In my entire career, I don’t remember seeing the Nasdaq take off more than 7%. It’s gigantic.”Peter Cardillo, an analyst at Spartan Capital Securities and a Wall Street broker for 50 years, told AFP. “It would seem that inflation has reached a peak. It’s all there,” he added, noting that all markets reacted to the good news of inflation finally appearing to moderate.
“We saw a huge retracement in bond rates, a stock market takeoff and a sharp drop in the dollar”, confirmed Cardillo, while oil rose as the market interpreted the inflation data as an incentive for energy demand. For Cardillo, meanwhile, this jump in the indices could mean “the end of the ‘bear market’ or downward market”.
“The conclusion we draw from this report is that the Fed will take its foot off the accelerator in its monetary adjustments”summed up John Kilduff of Again Capital.
Source: Ambito
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