The Nasdaq leads gains among major stock indices Wall Street on Wednesday, as a slightly lower-than-expected rise in inflation last month indicated that rapid interest rate hikes of the Federal Reserve are paying off.
The Dow Jones Industrial Average fell 0.23% to 33,485.82 units; the S&P 500 index rises 0.29% to 4,131.00 units; and the Nasdaq Composite rose 0.86% to 12,283.6012. units.
US Treasury yields fell, while the Nasdaq soared as much as 1.15% to its highest intraday level in more than eight months, and large-cap tech stocks like Apple Inc and Microsoft Corp gained about 0.5% each.
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The Labor Department’s Consumer Price Index (CPI) rose 4.9% in April from a year earlier, versus expectations for a 5% rise. The month-on-month CPI improved to 0.4%, after advancing 0.1% in March.
Fed fund futures traders now see an 86% chance that the bank will keep rates unchanged at its June meeting, and a 14% chance of another 25 basis point hike.
“Today’s report suggests that the Fed’s drive to quell inflation is working, albeit more slowly than they would like,” said Quincy Krosby of LPL Financial in Charlotte, North Carolina.
“This report will be followed by another before the Fed meets in June, in which rent-related inflation is expected to show definite signs of easing, helping to lower headline inflation.”
The rate-sensitive S&P 500 technology sector index was up 0.8%, while communication services rose 0.9%.
Source: Ambito
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