Major indexes rocketed and closed at session highs on Thursday afternoon. The Dow Jones Industrial Average posted gains of nearly 1,200 points as signs of cooling inflation indicates the Fed may have less work to do in coming months.
The blue chip index shook off the midterm conundrum and Wednesday's crypto black swan event, surging nearly 4% at market close.
The S&P 500 is seeing its best CPI release day performance since December 2008, according to Dow Jones Markets Data. The index finished today's session at a high, rising nearly 5.5%.
The Nasdaq composite posted even stronger gains, underpinned by interest-sensitive mega-techs. The index is on pace for its best CPI release day performance ever, lifting over 7% at 4:00 pm ET.
Crude oil rose 0.5% to trade at $86.33 per barrel. The yield on the benchmark 10-year Treasury note plunged to 3.82%. Treasury yields are seeing their largest declines since March 2020. The 2-year note's yield fell 0.328% while yield on the 10-year note fell 0.329%. Year to date, yield on both key Treasuries are up however by 3.59% and 2.33% respectively.
Volume on the NYSE and the Nasdaq surged to double digits compared to the same time on Wednesday, highlighting optimistic market sentiment.
October CPI core and headline inflation numbers were cooler than expected. Prices for all items rose 7.7% year-over-year — the smallest increase since the 12 months leading to January 2022. Core inflation rose 6.3%. Initial claims rose to 225,000 from 217,000 last week.
Chris Zaccarelli, Chief Investment Office at Independent Advisor Alliance, sees the good news as a pointer to more traditional 25 basis point rate hikes in 2023, after a 50-point hike in December. While maintaining a cautious outlook on earnings and credit quality, the likelihood of stocks exiting the year on a higher note just increased.
Markets also surged after Wednesday's FTX liquidity crunch triggered a crypto-led market plunge.
Friday's November University of Michigan consumer sentiment numbers remain on watch after October's high 59.9 reading. Forecasters expect no change in this barometer for the economy.
Stocks On Watch
In the Dow Jones, Apple surged 9% while Intel rose over 8%, clearing its 50-day line. Microsoft tested its 50-day line as shares climbed over 8%. Salesforce also cleared its 50-day line, rising over 9%. United Healthcare remains on watch as it nears a buy point of 553.23 in a cup-with-handle base.
Solar stocks are on a tear.
The latest findings by the International Energy Agency show that solar is cheaper than natural gas and coal. The Inflation Reduction Act (IRA) is already allowing these stocks to benefit from tax credits.
Enphase is up over 8% in a cup-with-handle base with a buy point of 316.97. SunPower rallied 20% on strong volume, piercing its 50-day line. Array Technologies added over 5% to Wednesday's double-digit gains.
Dow Jones stock Caterpillar is in a long cup base, nearing a buy point of 238.00.
Earnings Movers Outside Dow Jones
EV startup Nio rose over 11% on strong volume despite a mixed third quarter earnings report. The company beat estimates with $1.5 billion revenue but missed earnings views, posting a 20 cents per share loss.
AstraZeneca gapped up 6% strong earnings, reporting a 37% increase in revenue to $11 billion and earnings of 84 cents per share. AZN stock is approaching a buy point at 68.49.
Shares of Rivian are up over 17% and are testing their 50-day moving average after the EV startup maintained its 25,000 production target for 2022.
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