US: Stocks end with steep gains amid optimism on lower inflation

WALL Street stocks surged on Thursday and ended with steep gains, including a nearly 1,200-point jump for the Dow, as investors seized on data showing US inflation slowing to spark a rally.

The Dow Jones Industrial Average jumped 3.7 per cent to finish at 33,715.37, while the broad-based S&P 500 jumped 5.5 per cent to end at 3,956.37.

The tech-rich Nasdaq Composite Index was the big winner, soaring a whopping 7.4 per cent to 11,114.15.

“I don’t recall having ever seeing the Nasdaq being up 7 per cent ever (and) I’ve been watching the markets for over 50 years,” Peter Cardillo of Spartan Capital Securities told AFP.

The gains came after a closely-watched government data report showed annual consumer price inflation eased to 7.7 per cent in October, the lowest since January.

Even though inflation remains near the highest in decades, the slowdown gives hope that the Federal Reserve will be able to ease up on its aggressive interest rate hikes.

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The US central bank has increased the benchmark lending rate six times this year – including four consecutive super-sized hikes – as it tries to quash demand and rein in inflation.

Cardillo said the CPI data is an indication that inflation “has peaked.”

“That’s what it’s all about,” he said, adding that with today’s rally “the bear market is over.” AFP