The stock markets surged in today's session with Nasdaq gaining 7.4% as CPI data shows a decline in inflation.

The indices rocketed in today’s trading session as inflation dropped to a 9-month low, hammering Treasury yields and created a green wave in tech stocks. Investors now hope that the Federal Reserve will be more lenient on interest rates. “The softening of core inflation in the October release is welcome news for the Fed,” said Morgan Stanley in note.

The Dow ones rose 3.7%, the Nasdaq gained 7.4% and the S&P500 was up 5.5%.

The Labour Department stated that its consumer price index rose 0.4% in October, lower than the estimates of 0.6%. Core inflation, which is deemed a more accurate measure of inflation slowed to 0.3% from 0.6%. Analysts’ bets sat on a 0.5% increase.

The tech giants and Nasdaq constituents had a field day today with Meta rising 10%, Alphabet gained more than 7%, and Apple and Microsoft were up more than 8%.

However, many on Wall Street remain unconvinced that the tech rally will last, to some extent attributing the uptrend to investor positioning, a day ahead of the expiry options and indicating that the Federal Reserve is still expected to hike rates. Although, at a slower pace now.

Furthermore, most commodities rallied strongly in today’s session on the idea of a Fed rate pivot, with gold gaining more than 2% as the dollar declined its most in a day in 11 years.

Oil prices wiggled their way out of a 3-day hole as US inflation data may benefit oil drillers and refiners.

New York WTI was up 0.75% and London Brent was up 1.1%. Oil’s modest rise was due to continued fears on Covid cases and restrictions in China. In the Guangdong, new infections exploded, increasing worries that tough curbs could be put in place just like they were implemented in Shanghai earlier this year. The damage from China’s restrictions overshadows the benefits from any easing n Fed rates.

Earnings:

• AstraZeneca beat expectations as it reported an EPS of $1.67 on revenue of $10.98 billion.
• Tapestry also beat expectations as it reported earnings of $0.79 a share on revenue of $1.51 billion.
• Ralph Lauren reported an EPS of $2.33 with revenue of $1.6 billion for the quarter, also beating analyst expectations.

(Sources: investing.com, reuters.com)