© Reuters.
By Liz Moyer
Investing.com -- U.S. stocks surged on Tuesday after the report on November’s consumer price index showed inflation cooling more than expected.
At 10:24 ET (15:24 GMT), the Dow Jones Industrial Average was up 284 points or 0.8%, while the S&P 500 was up 1.7% and the NASDAQ Composite was up 2.5%.
The slower than expected pace of inflation raised hopes the Federal Reserve could also ease back on its interest rate hikes. The central bank meets today and tomorrow and will announce its decision on the next rate hike tomorrow afternoon.
Falling gasoline prices helped ease inflation last month, as did the price of used cars, which had become a pandemic-fueled phenomenon until recently.
The report showed CPI prices rose 7.1% for the year ended in November, while the core CPI rate excluding fuel and food rose 6.0%. Analysts were expecting a 7.3% rise in the top line and a 6.1% increase in the core rate from last year.
Many now expect the Fed will raise its benchmark rate by a half-percentage point, which would be smaller than the 0.75 percentage point increases it has put in place after each of its four most recent meetings.
The consumer inflation data comes after a higher than expected reading on producer prices. Investors have feared that the Fed’s moves to tame inflation would overshoot the mark and tip the economy into a recession.
Moderna Inc (NASDAQ:MRNA) shares jumped 25% after positive results on a drug for treating skin cancer. Oracle Corporation (NYSE:ORCL) shares rose 2.7% after it reported better than expected revenue as cloud computing continues to grow.
Oil rose. Crude Oil WTI Futures was up 2% to $74.67 a barrel, while Brent Oil Futures crude is up 2.4% to $79.89 a barrel. Gold Futures also rose 2%, to $1828.
