
By mid-afternoon trading sessions, the S&P 500 index had gained about 0.8 percent, and the Nasdaq Composite increased about 1.1 percent, reversing the losses from the prior two trading sessions. Moreover, the Dow Jones Industrial Average rose about 0.4 percent.
Along with rising stock markets, Treasury yields took off, too. The 10-year yield climbed six basis points, closing at about 4.16%. Gold prices fell 1%, holding at $2,167.
Investors took in the latest numbers on the Consumer Price Index (CPI), which largely had shifted so many key investment debates. The February numbers showed that headline inflation rose 0.4 percent on expectations. The ‘core’ CPI, the important measure excluding volatile food and energy prices, rose 0.4 percent monthly and 3.1 percent year-on-year, beating estimates.
The figures are also crucial because Fed policymakers have stated they won’t consider reversing the current aggressive rate rises until inflation falls for a sustained period. With the markets still pricing in the threat of recession—only hours before the CPI—traders in the US’s biggest stock index, the S&P 500, had been hedging moves of 0.9 percent either way in stocks.
In the crypto world, bitcoin was rallying again and rose above $72,000 earlier in the session. A sustained surge in allocations into crypto assets has pushed the lead token up by nearly 70 percent this year, prompting calls that the Bitcoin could go as high as $350,000 by year-end.
Turning to corporate news, Oracle shares jumped by more than 10 percent in response to a sign that things were going well for its cloud-computing business. Oracle has been working on cloud software with chipmaker Nvidia, which gave investors a sense of joy.
Overall, the immediate market response to the CPI data underscores how economic data can influence sentiment and markets and provides evidence for the ongoing efforts of market participants to navigate evolving macroeconomic conditions and policy developments.
Source: Alexandra Canal and Karen Friar, Yahoo! Finance March 12, 2024