U.S. stocks closed sharply higher Tuesday, after a subdued October inflation reading reinforced expectations the Federal Reserve is finished raising interest rates and investors continued to pencil in rate cuts in 2024.What happened
The Dow Jones Industrial Average
rose 489.83 points or 1.4%, to close at 34827.70 in its third consecutive day of gain.
The S&P 500
advanced 84.15 points or 1.9%, to end at 4495.70, recording its largest one-day percentage gain since April 27.
The Nasdaq Composite
went up 326.64 points or 2.4% to 14094.38. It is also the index’s largest one-day percentage gain since April 27.
The small-cap Russell 2000
surged 92.82 points, or 5.4%, to 1,798.32, turning the beaten down benchmark positive on the year.
The S&P 500 and Dow were at their highest close since Sept. 14, while the Nasdaq recorded its highest finish since Aug. 1.
What drove markets The October consumer-price index was unchanged from the previous month as cheaper gasoline took the edge off inflation, pointing to incremental progress in the Federal Reserve’s effort to get prices under control. Economists polled by the The Wall Street Journal had forecast a 0.1% increase in the CPI. The so-called core reading, which excludes volatile food and energy prices and is more closely watched by policy makers and investors, rose 0.2%, bringing its year-over-year rate down to 4%. Economists had looked for a 0.3% monthly rise and a 4.1% year-over-year figure, with some warning of the potential for an upside surprise. “The disinflationary trend is intact, raising investor spirits and encouraging hopes that a soft landing may still be in the cards, even if it’s not a given,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “An equity market that appeared to be looking for a catalyst for near-term direction has seemingly found it.”