US close: Dow soars 1,200 points after cooler inflation reading

Wall Street stocks surged through to the close on Thursday, after October's consumer inflation reading came in much cooler than expected.

At the close, the Dow Jones Industrial Average was up 3.7% at 33,715.37, as the S&P 500 added 5.54% to 3,956.37 and the Nasdaq Composite was 7.35% firmer at 11,114.15.

The Dow closed 1,201.43 points higher on Thursday, more than erasing the losses it recorded in Wednesday’s session.

“US inflation data has provided a welcome shot in the arm for markets, with the declines seen across both headline and core inflation bringing the kind of optimism that has been lacking without seeing non-energy related inflation turn lower,” said IG senior market analyst Joshua Mahony.

“The impact of today’s inflation data has been further accentuated by comments from Fed members Harker and Logan, who see the pace of rate hikes slowing over the coming meetings.”

Markets were now pricing a 73% chance of a 50-basis point hike in December, Mahony noted, coming off the back of four consecutive 75-basis point moves from the Fed.

“Quite whether that slowdown in tightening will be enough to maintain a prolonged period of upside for stocks remains to be seen.

“However, today’s data has certainly lifted hopes of a festive end to the year for investors.”

Thursday's primary focus was indeed news that the cost of living in the US rose by less than expected last month, according to the Department of Labor, with the annual rate of increase in consumer prices dropping to 7.7% in October from 8.2% in September.

Economists expected to see the headline consumer price index (CPI) rise by 0.6% month-on-month - or 7.9% year-on-year.

At the core level, meanwhile, CPI slipped to 6.3% from 6.7%.

“We have learned over the past 18 months or so that one good core CPI print proves nothing, but we see good reasons to think this one is the real deal, given the downward pressure in the pipeline,” said Ian Shepherdson at Pantheon Macroeconomics.

“We expect another decent core print in November - the data are published a couple of days before the December Federal Reserve meeting - giving the Fed scope to hike by only 25-basis points, provided the employment/wages numbers are on the soft side too.

“But that’s not a crazy bet - for what it’s worth, we think any further rate hikes are a mistake, and we see little chance that the terminal rate will be as high as 5%.”

Elsewhere in data , first-time jobless claims rose by 7,000 in the week ended 5 November, according to the Labor Department, with the advance figure for seasonally-adjusted initial claims hitting 225,000.

The previous week's level was revised up by 1,000 to 218,000, while the four-week moving average dropped by 250 to 218,750.

According to the same report, the advance seasonally adjusted insured unemployment rate came to 1.0% for the week ended 29 October, unchanged from the previous week's rate.

US midterms also remained in focus, with a narrow Republican win in both the House of Representatives and the Senate still looking likely following Tuesday's elections, creating an impasse between the White House and the Capitol in Washington, DC.

However, races in Arizona and Nevada remained tightly contested, while the Senate race between Democratic incumbent Raphael Warnock and NFL player-turned-GOP candidate Herschel Walker would now head to a December runoff vote in Georgia.

In the corporate space, dating app Bumble reversed earlier losses to close up 10.03% even after it posted third-quarter revenues well below Wall Street expectations

Electric vehicle maker Rivian added 17.42% after its posted a smaller than anticipated quarterly loss and maintained its full-year production guidance.

AstraZeneca was 6.62% stateside after reporting a swing to net profit earlier, and a hike in its full-year guidance.

Reporting by Josh White for Sharecast.com. Additional reporting by Iain Gilbert.

Dow Jones - Risers

Salesforce.Com Inc. (CRM) $156.30 10.02%
Apple Inc. (AAPL) $146.87 8.90%
Home Depot Inc. (HD) $311.70 8.70%
Microsoft Corp. (MSFT) $242.98 8.23%
Intel Corp. (INTC) $29.76 8.14%
Nike Inc. (NKE) $99.49 8.02%
American Express Co. (AXP) $154.75 6.09%
Visa Inc. (V) $205.57 6.00%
Boeing Co. (BA) $177.58 5.24%
Dow Chemical Co. (DOW) $49.96 4.78%

Dow Jones - Fallers

McDonald's Corp. (MCD) $275.88 -0.69%
Dowdupont Inc. (DWDP) $0.00 0.00%
Honeywell International Inc. (HON) $0.00 0.00%
Merck & Co. Inc. (MRK) $101.89 0.30%
Amgen Inc. (AMGN) $291.01 0.47%
Travelers Company Inc. (TRV) $183.30 0.63%
Unitedhealth Group Inc. (UNH) $544.17 0.65%
Johnson & Johnson (JNJ) $174.47 1.17%
Chevron Corp. (CVX) $181.30 1.89%
Walmart Inc. (WMT) $142.36 2.07%

S&P 500 - Risers

Invesco Ltd. (IVZ) $18.75 17.85%
T. Rowe Price Group Inc. (TROW) $124.65 16.36%
Mohawk Inds Inc. (MHK) $102.44 14.70%
Autodesk Inc. (ADSK) $222.96 14.57%
Nvidia Corp. (NVDA) $157.50 14.33%
Advanced Micro Devices Inc. (AMD) $68.47 14.27%
Carnival Corp. (CCL) $9.78 14.25%
Equifax Inc. (EFX) $187.24 13.74%
Celanese Corp. (CE) $104.29 13.67%
Dish Network Corp. (DISH) $16.06 13.50%

S&P 500 - Fallers

McKesson Corp. (MCK) $370.32 -4.12%
Unum Group (UNM) $42.48 -3.78%
Cardinal Health Inc. (CAH) $77.93 -2.79%
Altria Group Inc. (MO) $44.22 -2.19%
Amerisource Bergen Corp. (ABC) $155.00 -2.02%
Hershey Foods Corp. (HSY) $225.85 -1.92%
Campbell Soup Co. (CPB) $50.55 -1.73%
J. M. Smucker Co. (SJM) $145.87 -1.19%
ConAgra Brands Inc (CAG) $35.19 -0.96%
General Mills Inc. (GIS) $79.58 -0.95%

Nasdaq 100 - Risers

Qurate Retail Inc. (QRTEA) $1.88 14.63%
Asml Holdings N.V. (ASML) $560.79 14.57%
Autodesk Inc. (ADSK) $222.96 14.57%
Nvidia Corp. (NVDA) $157.50 14.33%
Dish Network Corp. (DISH) $16.06 13.50%
Workday, Inc. (WDAY) $153.13 13.47%
Align Technology Inc. (ALGN) $196.48 12.54%
Amazon.Com Inc. (AMZN) $96.63 12.18%
Lam Research Corp. (LRCX) $485.41 12.17%
Illumina Inc. (ILMN) $240.09 11.23%

Nasdaq 100 - Fallers

Regeneron Pharmaceuticals Inc. (REGN) $741.08 -0.25%
Citrix Systems Inc. (CTXS) $103.90 0.00%
Cerner Corp. (CERN) $0.00 0.00%
Mylan Inc. (MYL) $0.00 0.00%
Celgene Corp. (CELG) $0.00 0.00%
Alexion Pharmaceuticals Inc. (ALXN) $0.00 0.00%
Maxim Integrated Products Inc. (MXIM) $0.00 0.00%
Shire Plc Ads (SHPG) $0.00 0.00%
Xilinx Inc. (XLNX) $0.00 0.00%
Gilead Sciences Inc. (GILD) $82.60 0.34%