Stocks rallied Tuesday, building on their strong November gains, as Wall Street cheered new U.S. inflation data that raised hope of the Federal Reserve wrapping up its rate-hiking campaign.
The Dow Jones Industrials skyrocketed 489.83 points, or 1.4%, to 34,827.70.
The S&P 50 index was hoisted 84.15 points, or 1.9%, to 4,495.70.
The NASDAQ soared 326.64 points, or 2.4%, to 14,094.38.
Tuesday’s gains added to an already stellar performance this month for stocks. The S&P 500 had taken on 7.4%, and Dow is up 5.6% in November. The NASDAQ is up 9.8%, on pace for its biggest one-month gain since January.
Bank stocks such as Bank of America and Wells Fargo jumped on the hope that the economy could skirt a recession.
Shares of Home Depot, which were up nearly 6% on better-than-expected third-quarter earnings, led the gains for the Dow. Enphase Energies, Boston Properties and SolarEdge Technologies — each up more than 9% — led the S&P higher.
CPI was flat last month, while economists polled by Dow Jones expected a gain of 0.1% month over month. So-called core CPI, which strips out food and energy prices, was also lower than expected and the slowest in two years. This instilled optimism into the market that the Federal Reserve was finally making headway in its fight against inflation.
Following the report, fed-funds futures showed traders had removed any chance of a hike in December, from 14% odds prior.
Prices for the 10-year Treasury leaped, lowering yields to 4.45% from Monday’s 4.63%. Treasury prices and yields move in opposite directions.
Oil prices faded two cents to $78.24 U.S. a barrel.
Gold prices brightened $17.20 to $1,967.40.