2023-11-15 15:52:41
Noha Makram – Live – US stocks rose on Wednesday, as traders attempted to continue the previous session’s strong gains on the back of more positive inflation data.
The Dow Jones Industrial Average rose by 145 points, or 0.4%, the S&P 500 rose by 0.5%, and the Nasdaq rose by the same amount.
Yields on 10-year Treasury bonds jumped by 10 basis points during Wednesday’s trading session, after falling by 18 basis points yesterday.
Jay Hatfield, founder and CEO of Capital Advisors, said: “It is clear that interest rates are the main driver of the stock market, and its movements today make sense thanks to very good producer price data.”
The producer price index fell by 0.5% in October from September, its largest decline since April 2020.
Wall Street witnessed a strong session yesterday, Tuesday, as the S&P 500 and Nasdaq indexes witnessed their best daily performance since April.
These gains came after the October CPI, a key measure of inflation, showed the CPI was stable during the month of October, with annual core inflation rising at its slowest pace in two years. In the 12 months through October, the consumer price index jumped 3.2%, below economists’ estimates, after rising 3.7% in September.
After the inflation data, investors lowered their expectations about the Fed raising interest rates again in December, while bets on a rate cut in May rose to about 50%, according to the “FeedWatch” tool issued by CME.
Inflation rose in the United States last year to levels not reached in four decades, prompting the Federal Reserve to raise interest rates 11 times since March 2022.
Despite the rise in interest rates, the US economy and labor market remained resilient. The combination of the strength of the economy and the decline in inflation raised hopes that the Federal Reserve could succeed in achieving a smooth decline in the economy, that is, raising interest rates enough to curb inflation without pushing the economy into recession.
It is noteworthy that the Federal Reserve has not raised interest rates since July, and many economists believe that the campaign to raise interest rates has ended.
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