Stocks rose on Thursday after the October consumer price reading raised hopes that inflation had peaked.
The Dow Jones Industrial Average rose 820 points, or 2.5%. The S&P 500 rose 4%, while the Nasdaq Composite rose 5.5%.
The consumer price index, a broad measure of the costs of goods and services, rose just 0.4% for the month and 7.7% from a year ago. That was its lowest annual increase since January. Economists had expected increases of 0.6% and 7.9%, according to Dow Jones. Excluding volatile food and energy costs, the so-called core CPI rose 0.3% for the month and 6.3% annually, also less than expected.
“It certainly shows how much the markets have been concerned, worried and wanting to run with CPI if you get some kind of help here,” said NatWest’s John Briggs. “It just brings up the idea of peak inflation, the Fed’s peak … The Fed will slow down and peak instead of continuing to hike aggressively to 75 basis points at a time.”
Treasury yields fell 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 2-year Treasury yield fell more than 23 basis points to 4.395%.
Technology stocks that have been hit hardest this year as inflation and rates rose led the gains in early trade. Nvidia and Tesla rose 7.5% and 5.7%, respectively. Salesforce rose 7%. Apple gained 5%.
Semiconductor stocks rose, with shares of Lam Research and Applied Materials each up more than 5%. KLA also rose 3.7%.
Thursday’s advance 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 neared the 3,900 level, which has been key resistance for the market.