Wall Street is gaining ground as hot inflation data meets Reuters expectations

By Stephen Culp

NEW YORK (Reuters) – Wall Street rose slightly on Friday as shares fell back from previous highs as market participants digested hot inflation data, and in line with expectations, it also achieved the biggest annual rise in consumer prices in nearly four decades. they had.

The three major U.S. stock indices were green, with technology stocks weighing heavily.

The indexes were on the verge of closing higher than last Friday’s close, benchmarks were on track to pick up the biggest percentage point for the week since February, worries about the Omicron coronavirus variant faded and stocks returned to record levels.

A report from the Department of Labor showed that consumer prices rose by 6.8% year-on-year in the last month, the highest reading in over 39 years.

“We were looking forward to seeing a huge amount of hope,” said Tim Ghriskey, senior strategist for the New York Inverness Council portfolio. “I don’t think the market is surprised.”

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 is mainly caused by supply chain problems,” Ghriskey added. “But it seems that these issues can be alleviated, and we should see them in moderation over time. And that should take the foot off the accelerator of inflation.”

According to a survey by Reuters economists, the central bank will raise interest rates from close to zero to 0.25-0.50% 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.

“High inflation is already in the market,” said Peter Cardillo, head of market economics at Spartan Capital Securities in New York. “But that means we’ll probably be more insidious with the Fed and it’s likely that a change in monetary policy will occur in the latter part of the second quarter of 2022.”

It rose 122.25 points, or 0.34%, to 35,876.94, the S&P 500 29 points, or 0.62% to 4,696.45, and an added 54.19 points, or 0.35%, to 15,571.56. .

Most of the 11 major S&P 500 sectors were higher, with consumer goods and technology making the biggest leap.

Energy stocks fell the most.

Shares of the software company Oracle Corp. (NYSE 🙂 up 15.8% after announcing good third quarter forecasts.

Broadcom (NASDAQ 🙂 Inc. rose 7.1% after the chip maker announced a $ 10,000 billion share purchase plan.

Elon Musk, CEO of Tesla (NASDAQ 🙂 Inc., tweeted that “he’s thinking about quitting my job and becoming a full-time influencer.” Shares of electric car manufacturers rose by 1.2%.

Declining issues outperformed the NYSE with a ratio of 1.29 to 1; On the Nasdaq, the 1.57 and 1 ratios favored declines.

The S&P 500 posted a new 33 52-week high and a new low; The Nasdaq Composite recorded 25 new highs and 130 new lows.