PARIS (Reuters) – The New York Stock Exchange opened sharply higher on Thursday after monthly consumer price data in the United States suggested that inflation has now peaked, which could lead the U.S. Federal Reserve (Fed) to slow the pace of its monetary tightening.
About ten minutes after the first exchanges, the Dow Jones index gained 719.81 points, or 2.21%, to 33,233.75 points and the wider Standard & Poor’s 500 rose 3.35% to 3,874, 35 dots.
The Nasdaq Composite jumped 4.55%, or 471.02 points, to 10,824.20.
An hour before the opening of Wall Street, the US Department of Labor reported that the rise in the consumer price index (CPI) in the United States stood at 0.4% in October after an increase of the same magnitude in September and at 7.7% over one year against a gain of 8.2% in September.
It is the first time since February that the rise in the CPI index has fallen below 8% over one year after peaking at 9.1% in June, setting a record since November 1981.
The CPI index, excluding energy and food products, known as core inflation (“core CPI”), decelerated even more, to 0.3% over one month and 6.3% over one year, against 0.6% respectively. and 6.6% in September.
“Weaker than expected inflation data is acting as a tailwind for markets. Each line of the report shows sequential improvement,” said Art Hogan, market strategist at B. Riley Financial.
Added to this are jobless claims in the United States, which rose more sharply than expected last week, a sign that the tightening of the cost of credit is beginning to weigh on demand and the labor market.
Traders are now pricing in a 70% plus chance of a 50 basis point Fed rate hike next month versus a 45% chance before the inflation stat was released.
The CBOE Volatility Index, considered a reliable barometer of fear, fell to a low of around two months at 23.86 points.
In values, the technology groups Microsoft, Apple, Amazon, Meta Platforms, Tesla and Nvidia, sensitive to changes in interest rates, take from 3.48% to 6.70%.
Automaker Rivian Automotive soared 12.53% after confirming its annual production target.
The luxury group Tapestry, on the other hand, dropped 1.98% after lowering its annual forecast in the context of health restrictions in China.
The values linked to cryptocurrencies, they rise in the wake of the rebound of bitcoin, which had hit a two-year low the day before after the abandonment of the plan to buy FTX assets by Binance: Coinbase Global takes 9.31%, Riot Blockchain 5.92% and Hut 8 Mining 6.35%.
(Written by Claude Chendjou, edited by Sophie Louet)
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