Stocks, US yields climb after inflation data
By Chuck Mikolajczak
NEW YORK (Reuters) -A gauge of global stocks was set to snap a two-session fall on Tuesday, rising along with Treasury yields after data showed U.S. inflation remained sticky in February, indicating the Federal Reserve could keep interest rates higher for longer than is currently expected.
The consumer price index (CPI) rose 0.4% last month amid higher costs for gasoline and shelter, the Labor Department said, matching the estimate of economists polled by Reuters, after climbing 0.3% in January.
In the 12 months through February, the CPI increased by 3.2%, just above the 3.1% estimate, after advancing 3.1% through January.
On Wall Street, the S&P 500 registered another record high, buoyed in part by a surge in Oracle (NYSE:ORCL) shares. The Dow Jones Industrial Average rose 235.83 points, or 0.61%, to 39,005.49, the S&P 500 gained 57.33 points, or 1.12%, to 5,175.27 and the Nasdaq Composite increased 246.36 points, or 1.54%, to 16,265.64.
U.S. Treasury yields also advanced after the data, with the yield on benchmark U.S. 10-year notes up 4.9 basis points to 4.153% after reaching a session high of 4.172% following a soft auction of $39 billion by the Treasury.
«The hotter inflation is an indication that the consumer is doing well, that there's pricing power in this economy that companies are taking advantage of, and the other data tells us that it's not hurting somewhat,» said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle.
«However, the bond market has to factor in what is the Fed's reaction function going to be to a somewhat more robust economy. And that's higher for longer and that's where you have to have rates come up kind of across the board.»
The 2-year
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