US equities rise as inflation data meet expectations | Financial Market News
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The three major U.S. stock indices advanced, with technology stocks weighing heavily.
Wall Street advanced on Friday and the S&P 500 reached its biggest close ever, with market participants digesting a consensus reading of inflation that agreed, but with the largest annual rise in consumer prices in nearly four decades.
The three major U.S. stock indices advanced, with technology stocks weighing heavily.
The Dow Jones Industrial Average rose 0.6 percent to 35,970.99, the S&P 500 gained 0.95 percent to 4,712.02, and the Nasdaq Composite Technology Index rose 0.73 percent to 15,630.60.
All indexes ended the session higher than last Friday’s close, and the benchmark S&P 500 had the biggest weekly percentage gain since February, as the decline in the Omicron coronavirus variant helped boost the broad rally earlier in the week.
A U.S. Department of Labor report shows that consumer prices have risen at a 6.8 percent annual growth rate over the past month, the highest reading in over 39 years.
“It simply came to our notice then [consumer price index or CPI] said “Chuck Carlson, CEO of Horizon Investment Services in Hammond, Indiana.
With ongoing supply chain challenges, sustained inflation suggests that the U.S. Federal Reserve may well begin to tighten its volatile monetary policy sooner than many expected.
“Clearly, it’s mainly driven by supply chain issues,” said Tim Ghriskey, senior portfolio strategist at New York’s Inverness Counsel. “But it seems that these problems can be alleviated, and we should see them in moderation over time. And that should take a toll on the inflation accelerator.”
According to a survey of economists by Reuters, the central bank will raise interest rates from close to zero to 0.25-0.50 per cent in the third quarter of next year, followed by another in the fourth quarter.
The Fed is expected to meet next week for a two-day monetary policy meeting, and market participants will look for clues to these rate hikes along with a pace that will reduce bond purchases.
“The Fed has telegraphed that it has tightened sooner rather than later,” Carlson said. “Markets are more comfortable with the Fed tightening if it lowers inflation expectations.”
Shares of the Oracle Corp software company rose after announcing good third-quarter forecasts.
Broadcom Inc. moved forward after the chip maker announced a $ 10 billion share purchase plan.
Elon Musk, CEO of Tesla Inc., tweeted that “he’s thinking about quitting my job and becoming a full-time influencer.” The stock of the electric car manufacturer ended the session higher.
Southwest Airlines went down after Goldman Sachs went down from “neutral” to “sell” shares of commercial airlines.
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