On Thursday, all three key indices of Wall St had closed out the session sharply higher, while S&P 500 and Nasdaq had logged their largest intra-session percentage gain in more than 2-1/2 years, as signs of a slowdown in US inflation in October had heightened up speculations that the US Fed might become more open to a less hawkish stance.
If truth is to be spoken, in the day’s have-scale gain in Wall Street’s key indices came forth as US inflation fell below 8.0 per cent mark last month, cheering up the Wall Street to jump on to the bandwagon of a mass-scale buy-the-dip frenzy.
In point of fact, earlier in the day, US Labour Department data had unveiled that US Consumer Price Index (CPI) soared less than anticipated last month, rising 7.7 per cent over past twelve months through October, while US CPI rose by 0.4 per cent last month on a month-on-month (MoM) basis, eventually building a solid case for the US Fed to slow down the pace of its rate-hike cycle.
On top of that, US Fed Chair Jerome Powell was quoted saying after November 1-2 US Fed policy meet that the time to put an end to an aggressive rate-hike cycle might already have come, while he also had pledged to small-sized rate-hikes in future in a bid to tame a teetering inflation surge.
Adding further fuels to investors’ optimism, growing uncertainties over US mid-term election with the Republicans leading in both houses by a narrow margin so far, had added to further holocaust for the greenback, which in effect had helped equity indices all over the globe.
US Dollar Index (DXY) fell by 2.23 per cent on Thursday.
Wall St. shoots up as inflation worries ease
Citing statistics, in the day’s Wall St. wind-down, trade-sensitive Dow jumped 3.70 per cent to 33,715.37 and Wall Street bellwether S&P 500 snowballed as much as 5.54 per cent to 3,956.31, while tech-heavy Nasdaq skyrocketed 7.35 per cent to 11,114.15.
Meanwhile, adding that money markets across the United States might be overdramatizing the October inflation data, a head of portfolio management at Horizon Investments in Charlotte, Zach Hill said, “The market is - as it has been a few times this year - very eager to trade a 'Fed pivot' ... but we think the market is getting a little ahead of itself based on one print”.