Wall Street rises sharply on optimism ahead of key inflation report

Wall Street rises sharply on optimism ahead of key inflation report
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  • CPI report before Thursday’s bell
  • Bed, Bath & Beyond expands on recent gains
  • Indices: Dow up 0.8%, S&P 500 up 1.3%, Nasdaq up 1.8%

NEW YORK, Jan 11 (Reuters) – U.S. stocks ended sharply on Wednesday with the S&P 500 and Nasdaq each up more than 1% as investors were upbeat ahead of an inflation report that could give the Federal Reserve a chance to bounce back. aggressive interest rate hikes.

The much-anticipated report, due on Thursday, was forecast by economists polled by Reuters to show that US consumer prices rose 6.5% year-on-year in December, up modestly from a 7.1% rise in November.

Real estate across sectors (.SPLRCR) and is given to the consumer (.SPLRCD) Microsoft was the strongest performer of the day (MSFT.O) (AMZN.O) and other mega-cap growth names gave the S&P 500 the biggest boost.

The benchmark index rose to 2023 after falling sharply last year. Hopes that the Fed could soon ease its aggressive tightening after raising the federal funds rate seven times in 2022 buoyed the market in recent sessions, even as comments from some Fed officials supported the view that the central bank needs to remain vigilant. raising rates to fight inflation.

“Investors expect we’re closer to the break than at any point last year,” said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma. He said that this will be welcomed by the market.

In addition, “if you have any year, it’s not surprising that there’s a lot of flashbacks at the beginning of the new year,” he said.

Dow Jones Industrial Average (.DJI) The S&P 500 rose 268.91 points, or 0.8%, to 33,973.01 (.SPX) Up 50.36 points or 1.28% to 3,969.61 points and the Nasdaq Composite (.IXIC) It increased by 189.04 points or 1.76% to 10,931.67 points.

Traders work on the trading floor of the New York Stock Exchange (NYSE), New York, USA, January 5, 2023. REUTERS/Andrew Kelly

Money market participants see a 75% chance that the Fed will raise interest rates by 25 basis points in February.

This week also marks the start of fourth-quarter earnings season for S&P 500 companies, and overall S&P 500 earnings are expected to decline year over year, according to Refinitiv’s IBES data.

The biggest U.S. banks are expected to cut their quarterly earnings as the season kicks off later this week, as risks of a recession increase due to tightening monetary policy.

Goldman Sachs (GS.N) started A source familiar with the matter said on Wednesday that the layoffs had led to cost-cutting. Shares of Goldman Sachs rose 2%.

Retailer Bed Bath & Beyond Inc (BBBY.O) reached 68.6% despite sharply extended recent gains gloomy quarterly resultssome investors speculate that it could be a potential takeover target.

In the US, the stock traded 11.42 billion shares over the past 20 trading days, compared to an average of 11 billion shares for the full session.

Advancers outnumbered decliners on the NYSE by a ratio of 3.78 to 1; A 2.25-to-1 ratio favored advancers on the Nasdaq.

The S&P 500 hit 11 new 52-week highs and 1 new low; The Nasdaq Composite recorded 98 new highs and 20 new lows.

Reporting by Caroline Valetkevitch; Additional reporting by Shubham Batra and Amruta Khandekar in Bengaluru; Edited by Shounak Dasgupta and Grant McCool

Our standards: Thomson Reuters Trust Principles.

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