Dow, S&P 500 edge higher after inflation data keeps Fed rate-cut hopes intact
© Reuters. FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, U.S., July 19, 2021. REUTERS/Andrew Kelly/File Photo
The S&P 500 and the Dow edged higher on Wednesday after in-line consumer price inflation data kept the U.S. Federal Reserve on track to deliver another interest rate cut in December, News.Az reports citing Reuters .
The consumer price index rose 0.2% in October for the fourth straight month, the Labor Department's Bureau of Labor Statistics said, and advanced 2.6% on an annual basis. Excluding the volatile food and energy components, the CPI increased 0.3% in October. The numbers were in line with economists' forecasts.
"With inflation holding steady, the market narrative should not see a significant shift as a result of today's data," said Josh Jamner, investment strategy analyst at ClearBridge Investments.
Expectations for a 25-basis point interest rate cut at the Fed's December meeting jumped to more than 82% after the data, from around 58%, according to CME FedWatch.
Minneapolis Fed President Neel Kashkari said in an interview with Bloomberg TV he was confident inflation was headed down, noting that the CPI data "confirms" that downward path.
The Dow Jones Industrial Average rose 193.95 points, or 0.44%, to 44,104.93, the S&P 500 gained 13.05 points, or 0.22%, to 5,997.18, and the Nasdaq Composite lost 1.86 points, or 0.01%, to 19,279.54.
The benchmark 10-year Treasury yield eased slightly on the day, but was still above the 4.4% mark after rising on expectations that President-elect Donald Trump's policies could exacerbate inflation.
Rising yields had pressured the three major Wall Street indexes to close lower on Tuesday.
The consumer price index rose 0.2% in October for the fourth straight month, the Labor Department's Bureau of Labor Statistics said, and advanced 2.6% on an annual basis. Excluding the volatile food and energy components, the CPI increased 0.3% in October. The numbers were in line with economists' forecasts.
"With inflation holding steady, the market narrative should not see a significant shift as a result of today's data," said Josh Jamner, investment strategy analyst at ClearBridge Investments.
Expectations for a 25-basis point interest rate cut at the Fed's December meeting jumped to more than 82% after the data, from around 58%, according to CME FedWatch.
Minneapolis Fed President Neel Kashkari said in an interview with Bloomberg TV he was confident inflation was headed down, noting that the CPI data "confirms" that downward path.
The Dow Jones Industrial Average rose 193.95 points, or 0.44%, to 44,104.93, the S&P 500 gained 13.05 points, or 0.22%, to 5,997.18, and the Nasdaq Composite lost 1.86 points, or 0.01%, to 19,279.54.
The benchmark 10-year Treasury yield eased slightly on the day, but was still above the 4.4% mark after rising on expectations that President-elect Donald Trump's policies could exacerbate inflation.
Rising yields had pressured the three major Wall Street indexes to close lower on Tuesday.
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