(New York) The New York Stock Exchange celebrated inflation on Tuesday which slowed to 3.2% in October year-on-year in the United States, with the indices moving sharply higher.
The Dow Jones index advanced 1.16%, the technology-dominated NASDAQ climbed 2.05% and the S&P 500 gained 1.59% around 9:55 a.m. Eastern time.
The US Consumer Price Index (CPI) slowed to 3.2% from 3.7% year-on-year in October, better than expected. Over a month, prices have not changed.
Excluding food and energy prices, however, inflation is easing less quickly, standing at +0.2% over the month and +4% over one year.
These figures “nip in the bud the last chances of an interest rate increase in December,” assured Andrew Hunter of Capital Economics, referring to the next monetary meeting of the American central bank (Fed).
Craig Erlam, analyst for Oanda, judges that “the Fed will be pleasantly surprised”. The members of the Monetary Committee “will feel more relaxed knowing that they are going in the right direction,” added the analyst interviewed by AFP.
“Inflation remains well above target, but moving in the right direction,” commented Rubeela Farooqi, chief economist.
“We think this data supports the idea of a continued pause in Fed rate hikes even if policymakers want to maintain a restrictive bias as prices continue to rise,” the analyst added.
The specter of the possibility of a final rise in rates evaporating in the eyes of the market, the dollar tumbled 1.22% against the European currency, passing the threshold of 1.08 dollars per euro.
As for bond yields on ten-year and two-year notes, they fell quickly. The ten-year rate fell to 4.45% compared to 4.63% the day before, the lowest since the end of September. The two-year rate sank to 4.84% against 5.03% on Monday.
An easing of the bond market generally favors stocks.
Other favorable news on the budgetary policy front, the new Speaker of the House of Representatives Mike Johnson indicated on Tuesday that a temporary resolution avoiding a closure of federal services (“shutdown”) could be voted on in the House as early as Tuesday.
On the value side, the DIY store brand Home Depot gained 5.48% while the group announced sales and profits that were down, but better than expected.
“We have seen continued client interest in small projects and felt pressure for certain large budgets, in certain categories,” said Ted Decker, head of the group.
All eleven sectors of the S&P were in the green, starting with the real estate sector (+3.70%), the one which has suffered the most from the rise in interest rates over the past eighteen months.
Consumer products (+2.87%) and public utilities (+2.09%) also drove all sectors.
Electric vehicle manufacturers were on the rise, notably Tesla which gained almost 5%, but also its smaller competitors like Rivian (+4.42%) or Lucid (+7.43%).
Microsoft reached a new all-time high at $371.30 (+1.25%).
The action of the manufacturer of graphics cards and microprocessors, very popular with the artificial intelligence sector, was approaching $500, gaining almost 2% to $496.