Dow rises 700 points as new data boosts hopes U.S. inflation may peak

Fairlead's Katie Stockton says rally in coming weeks will be a selling opportunity

Stocks surged on Thursday after consumer price data for October sparked hopes that inflation has peaked.

The Dow Jones Industrial Average rose 764 points, or 2.3%. The S&P 500 rose 3.7% and the Nasdaq Composite rose 5%.

The consumer price index, a broad measure of the cost of goods and services, rose just 0.4% this month and 7.7% from a year earlier. It was the lowest annual increase since January. Economists expected growth of 0.6% and 7.9%, according to Dow Jones data. Excluding volatile food and energy costs, the so-called core CPI rose 0.3% for the month and 6.3% from a year earlier, also missing expectations.

“If you get any kind of help here, it definitely shows how much the market is concerned, worried and wants to run the CPI,” said NatWest’s John Briggs. “It just brings up the idea that inflation is peaking, the Fed is peaking. … the Fed will slow and peak, rather than continuing to hike rates by 75 basis points at a time.”

U.S. Treasury yields plummeted after the CPI report, with the 10-year Treasury yield falling more than 18 basis points to 3.946%, below the key 4% level. The two-year U.S. Treasury yield fell more than 23 basis points to 4.395%.

Tech stocks, the hardest hit this year, led gains in early trade as inflation and interest rates surged. Nvidia and Tesla surged 7.5% and 5.7%, respectively. sales force jumped 7%. apple up 5%.

Semiconductor stocks got a boost, with shares at Lamb Study and Applied Materials Both rose more than 5%. KLA also rose 3.7%.

Thursday’s gains reignited a rally that began in mid-October but stalled in recent weeks. The Dow hit its highest since August on Thursday and the S&P 500 near 3,900, which has been a key resistance for the market.

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