U.S. Stocks Likely To Extend Yesterday’s Rally On Tamer-Than-Expected Inflation Data

After moving sharply higher over the course of the previous session, stocks are likely to extend the rally in early trading on Tuesday. The major index futures are currently pointing to an early surge for the markets, with the S&P 500 futures jumping by 2.2 percent.

The futures spiked following the release of a report from the Labor Department showing consumer prices in the U.S. inched up by less than expected in the month of November.

The Labor Department said its consumer price index crept up by 0.1 percent in November after climbing by 0.4 percent in October. Economists had expected consumer prices to rise by 0.3 percent.

Excluding food and energy prices, core consumer prices edged up by 0.2 percent in November after rising by 0.3 percent in October. Core prices were expected to show another 0.3 percent increase.

The report also showed the annual rate of growth by consumer prices slowed to 7.1 percent in November from 7.7 percent in October.

The year-over-year increase in November, which came in below economist estimates for a slowdown to 7.3 percent, reflects the slowest annual growth since December 2021.

The annual rate of growth by core consumer prices also slowed to 6.0 percent in November from 6.3 percent in October, while economists had expected price growth to slow to 6.1 percent.

The tamer-than-expected inflation data is likely to ease concerns about the outlook for interest rates ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed is still likely to raise interest rate by another 50 basis points, but the slower price growth may offset recent worries about future rate hikes.

Stocks moved sharply higher over the course of the trading session on Monday, regaining ground following the steep drop seen last week. The major averages all showed strong moves to the upside on the day.

The major averages saw continued strength going into the close, ending the session at their best levels of the day. The Dow surged 528.58 points or 1.6 percent to 34,005.04, the Nasdaq jumped 139.12 points or 1.3 percent to 11,143.74 and the S&P 500 shot up 56.18 points or 1.4 percent to 3,990.56.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. Japan’s Nikkei 225 Index rose by 0.4 percent, while China’s Shanghai Composite Index edged down by 0.1 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.’s FTSE 100 Index is up by 0.4 percent, the French CAC 40 Index and the German DAX Index are up by 1.2 percent and 1.4 percent, respectively.

In commodities trading, crude oil futures are jumping $1.03 to $74.20 a barrel after surging $2.15 to $73.17 a barrel on Monday. Meanwhile, after sliding $18.40 to $1,792.30 an ounce in the previous session, gold futures are climbing $26.50 to $1,818.80 an ounce.

On the currency front, the U.S. dollar is trading at 135.20 yen compared to the 137.67 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0644 compared to yesterday’s $1.0537.

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