US stocks bounce on inflation optimism

Traders work on the floor of the New York Stock Exchange, on Dec 13, 2022 in New York City. PHOTO: AFP

NEW YORK - Wall Street stocks jumped on Tuesday as consumer inflation data came in better than expected, as markets shifted focus to the US central bank’s upcoming policy decision.

The S&P 500 ended 0.7 per cent higher at 4,019.65, while the Dow Jones Industrial Average was up 0.3 per cent at 34,108.64.

Meanwhile, the tech-rich Nasdaq Composite Index bounced 1 per cent as well to 11,256.81.

“The market surged with the inflation (data) this morning,” said Mr Peter Cardillo of Spartan Capital Securities.

He added that the S&P 500 closing over 4,000 suggests that the “year-end rally remains on course.”

Labour Department figures showed the consumer price index – a key measure of inflation – rose 7.1 per cent from a year ago in November.

This was down from October’s pace, fuelling optimism that rapid price increases may soon be moderating.

President Joe Biden reacted with cautious optimism about the US economy, saying that figures gave “a reason for some optimism for the holiday season and I would argue for the year ahead.”

Investors are now awaiting a key rate decision with the Federal Reserve set to conclude a policy meeting on Wednesday.

Many expect the Fed to opt for a smaller half-point interest rate hike as effects of its aggressive campaign to cool demand this year trickle through the economy.

Among individual companies, shares of Meta picked up 4.7 per cent and Google parent Alphabet rose 2.5 per cent. AFP

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