Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% Upgrade now

Stocks rally, dollar falls on easing inflation

Stock Markets Aug 10, 2022 22:21
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. People walk past a screen displaying the Hang Seng stock index outside Hong Kong Exchanges, in Hong Kong, China July 19, 2022. REUTERS/Lam Yik 2/2

By Sinéad Carew

NEW YORK (Reuters) - Wall Street equities rallied and the dollar tumbled after signs of sharply decelerating U.S. inflation prompted bets that the Federal Reserve would raise interest rates at a slower pace than previously expected.

Treasury yields mostly pulled back from an earlier plunge as investors digested data showing that consumer prices did not rise in July as the cost of gasoline fell, delivering the first notable sign of relief for Americans who have watched inflation soar over the past two years.

Traders priced in a 50 basis points rate hike next month, compared with the 75 bps increase that had been expected before inflation report.

"This morning's inflation report was a stress reliever and now we're getting buying in stocks, bonds and commodities. We haven't had an inflation release that was lower than expected in quite some time," said John Augustine, chief investment officer at Huntington National Bank in Columbus, Ohio.

But Augustine said that there was still a lot of uncertainty around what the Fed will do and the economic growth and earnings outlook for 2023. "We're staying neutral here until we get a better view of next year," he said.

The Dow Jones Industrial Average ended the session up 535.1 points, or 1.63%, at 33,309.51 while the S&P 500 rose 87.77 points, or 2.13%, to 4,210.24 and the Nasdaq Composite added 360.88 points, or 2.89%, to finish at 12,854.81.

The Nasdaq closed 20.8% above its recent closing low reached on June 16. It would have to rise an additional 24.9% from Wednesday's close to return to its record high, reached in November, to confirm a new bull market. [.N]

The pan-European STOXX 600 index closed up 0.89% and MSCI's gauge of stocks across the globe gained 1.80%.

In Treasuries, benchmark 10-year notes last rose 2/32 in price to yield 2.7901%, from 2.797% late on Tuesday. The 30-year bond last fell 19/32 in price to yield 3.0359%, from 3.005%.

The 2-year note last rose 4/32 in price to yield 3.2244%, from 3.286%. The drop in Treasury yields immediately after the inflation data indicated that traders had been expecting a rise in inflation. [US/]

During Wednesday's session, Chicago Fed President Charles Evans said inflation was still "unacceptably" high, and that the Fed would need to continue to raise rates.

Minneapolis Federal Reserve Bank President Neel Kashkari said that while the inflation reading was "welcome" the Fed was "far, far away from declaring victory" and needed to raise rates much higher.

{{2126|The dodollar index fell 1.072%, with the euro up 0.87% to $1.03.

The Japanese yen strengthened 1.69% versus the greenback at 132.91 per dollar, while sterling was last trading at $1.2217, up 1.13% on the day.

Oil prices rebounded from losses early in the session after encouraging figures on U.S. gasoline demand and as lower-than-expected U.S. inflation data drove investors into riskier assets.[nL1N2ZM043]

U.S. crude settled up 1.58% at $91.93 per barrel and Brent finished at $97.40, up 1.13% for the day. [O/R]

Spot gold dropped 0.2% to $1,790.80 an ounce as hawkish remarks from U.S. Federal Reserve officials dampened hopes of a let-up in aggressive policy tightening after the inflation data. Gold had charged higher and broke above the $1,800 level before losing ground.

Stocks rally, dollar falls on easing inflation

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Jason Rich
Jason Rich Aug 10, 2022 23:14
Saved. See Saved Items.
This comment has already been saved in your Saved Items
More nonsense about high inflation … “2 years” like the starting point in august 2020 wasn’t massively depressed!
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email