Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks IPOs and placings
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
US close: Stocks post huge rally as inflation falls more than predicted
(Sharecast News) - US stocks surged from the off and held on to impressive gains by the close after a bigger-than-expected drop in inflation reignited hopes that the Federal Reserve will refrain from hiking interest rates again this cycle. Many Fed policymakers - including chair Jerome Powell - had made comments in the past week indicating that they wouldn't hesitate to hike rates again if inflation didn't start coming down towards the 2% target.
So Tuesday's downside surprise came as welcome relief to the market, driving the S&P 500 and Nasdaq's best daily performances since April. Stocks were also helped by a tumble in bond yields with the US 10-year Treasury yield dropping 18.1 basis points to 4.455%.
The Dow Jones Industrial Average finished 1.4% higher, while the S&P 500 jumped 1.9% and the Nasdaq rose 2.4%.
All eyes on inflation data
According to the Department of Labor, the consumer price index (CPI) held steady on a seasonally adjusted basis in October, contrary to an expected 0.1% increase and down from 0.4% growth in September. That decreased the year-on-year inflation rate from 3.7% to 3.2% in October - slightly below the consensus forecast of 3.3%.
Notably, the closely watched measure of core annual inflation, which excludes food and energy prices, eased to 4.0% in October, surprising analysts who had pencilled in an unchanged reading from September of 4.1%.
"Falling prices at the pump were largely responsible for today's cooler-than-expected US inflation numbers, which gives credence to the narrative that peak rates have truly been reached," said Danni Hewson, head of financial analysis at AJ Bell.
"Markets on both sides of the Atlantic rallied as expectation mounted that America's fight against rising prices is pretty much over, and despite a few bumpy patches the landing strip ahead looks about as soft as anyone could have hoped for."
IG senior market analyst Axel Rudolph said that market expectations for the first rate cut by the Fed were brought forward to May 2024 following the inflation figures. "Analysts now anticipat[e] to see four rate cuts before the end of next year and rates to come back down to 4.25% to 4.5%," he said.
Looking ahead to Wednesday's economic data schedule, the New York manufacturing index will be released, along with US retail sales, the producer price index and business inventories.
Home Depot impresses
Home Depot was the first of the major retailers to release results this earnings season, and impressed with better-than-expected third-quarter profits. The share price rose over 5% despite the home-improvement chain reporting a 3% sales decline and guiding to 3-4% drop for the full year.
Snapchat shares surged on reports that the social media company had entered into a partnership with Amazon to allow in-app purchases from the e-commerce group.
Beauty Health's market cap dropped over 60% after the skincare reported a worse-than-expected third-quarter loss and delivered full-year revenue guidance short of analysts' estimates.
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.