Stock market today: Wall Street rallies toward record following the latest inflation report
Stocks are rallying on Wall Street following the latest update on inflation
NEW YORK — U.S. stocks are rallying Tuesday following the latest update on inflation.
The S&P 500 was 0.8% higher in afternoon trading and hovering around its all-time high set last week. The Dow Jones Industrial Average was up 158 points, or 0.4%, as of 12:31 p.m. Eastern time, and the Nasdaq composite was 1% higher after all three indexes erased earlier losses.
The highly anticipated inflation report said prices paid by U.S. consumers rose a bit more last month than economists expected. It kept the door closed on hopes that the Federal Reserve could deliver the cuts to interest rates that Wall Street craves at its next meeting next week.
But the inflation figures were still close to expectations, and traders were holding onto hopes that the longer-term trend downward will keep the Fed on track to cut its main interest rate in June. Plus, inflation may not be as hot in reality as the morning’s report suggested.
“January and February are notoriously noisy months for a lot of economic data,” said Brian Jacobsen, chief economist at Annex Wealth Management.
“The Fed wasn’t planning on cutting rates next week, and this report doesn’t change that. The discussion around the table will be more about the longer-term trend.”
The fear is “sticky” inflation that refuses to go down will force the Fed to keep interest rates high, which grinds down on the economy and investment prices.
“Another hotter-than-expected CPI reading may breathe new life into the sticky inflation narrative, but whether it actually delays rate cuts is a different story,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.
For months, traders
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