US: Stocks rise on hopes of cooling inflation

WALL Street stocks rallied on Wednesday as markets await key US inflation data, with hopes that the figures will show a further slowing of price increases.

The consumer price index (CPI), a key gauge of inflation due for release on Thursday, will be closely-watched for its implications on Federal Reserve policy.

Over the past year, the Fed has raised interest rates aggressively to combat decades-high inflation in the United States, though it has since eased its pace of increases. On Wednesday, the Dow Jones Industrial Average closed 0.8 per cent higher at 33,973.01, while the broad-based S&P 500 added 1.3 per cent to 3,969.61.

The tech-heavy Nasdaq Composite Index surged 1.8 per cent to 10,931.67, clocking its fourth consecutive positive session.

“The biggest driver here is the inflation expectations. The consensus forecasts are for a slowdown in the CPI,” said LBBW’s Karl Haeling.

With an overall trend of falling inflation, “that will ultimately ensure that the pace of rate hikes slows,” he said.

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Investors are also looking towards a “plateau” when rate increases will be over, he added.

Later in the week, investors are looking out for earnings releases from JPMorgan Chase and other banks. AFP