Wall Street’s Major Stocks Rise. Wall Street’s main stock indexes rose on Tuesday on lower-than-initial inflation data. This raises expectations that the Federal Reserve or The Fed’s high interest regime is over and could start cutting it next year.
The S&P 500 (.SPX) and Nasdaq (.IXIC) indexes opened at their highest level in the last 2 months following unchanged US inflation in October despite the phenomenon of lower gasoline prices.
In the 12 months to October, the CPI rose 3.2% after rising 3.7% in September, while economists polled by Reuters had expected a 3.3% rise on a year-on-year basis. Core inflation, excluding volatile food and energy components, rose 4.0% versus economists’ estimates of a 4.1% rise.
The inflation realization data prompted traders to remove speculation that the Fed would raise borrowing costs further and switch to betting on interest rate cuts starting in May.
Wall Street’s Major Stocks Rise. U.S. Treasury yields fell, with the two-year yield, which best reflects short-term interest rate expectations, slipping to a two-week low.
That in turn lifted megacab growth stocks such as Nvidia (NVDA.O), Alphabet (GOOGL.O), Amazon.com (AMZN.O) and Tesla (TSLA.O) up between 1.7% and 5% at the start of trading. The Russell 2000 small-cap index (.RUT) jumped 3.3%.
Wall Street’s main indexes have rebounded strongly in November amid expectations that US interest rates are nearing their peak, even as Fed Chair Jerome Powell last week left the door open to further tightening.