Stocks are bursting toward their best day in years Thursday as exhilaration sweeps Wall Street and financial markets worldwide after a report showed inflation in the United States slowed last month by even more than expected.
NEW YORK — Wall Street blasted off Thursday to soar to its best day in more than two years as exhilaration swept through markets after a report showedThe S&P 500 surged 5.5%, while the Dow Jones Industrial Average leaped 1,200 points and the Nasdaq composite packed what could be a year’s worth of gains into one day by roaring 7.4% higher.
Perhaps more importantly, inflation also slowed more than expected after ignoring the effects of food and energy prices. That’s the measure the Fed pays closer attention to. So did inflation between September and October. By raising rates, the Fed is intentionally trying to slow the economy and jobs market in hopes of undercutting inflation, which hit a four-decade high in the summer. The risk is that it can create a recession if it goes too far, and higher rates drag down on prices for stocks and other investments in the meantime.
The Nasdaq composite, which is full of tech-oriented stocks, soared to its best day since March 2020, when Wall Street was in the midst of its frenzied recovery from the crash caused by the coronavirus. The broader S&P 500, which sits at the heart of many 401 accounts, had its best day since April 2020.
Slower inflation could get the Federal Reserve to downshift the size of its rate hikes at its next policy meeting in December, after it pushed through four straight mega increases of 0.75 percentage points. That could open the way for the Fed to return to the more typical increases of 0.25 percentage points before pausing hikes completely.
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