by Stephen Culp
NEW YORK (Reuters) – The New York Stock Exchange ended sharply higher on Thursday, as economic data showed a slowdown in inflation fueling hopes that the U.S. Federal Reserve will end its rate hike.
The Dow Jones Industrial Average gained 1.14%, or 383.19 points, to 34,029.69 points.
The broader S&P-500 gained 54.27 points, or 1.33%, to 4,146.22 points.
The Nasdaq Composite advanced for its part by 236.94 points (1.99%) to 12,166.27 points.
The three main indices of Wall Street ended in the green, the large caps of the high technology sector, sensitive to rate expectations, contributing in particular to the good performance of the Nasdaq.
Economic data released before the start of the session by the US Department of Labor showed that producer prices (PPI) in the United States posted a surprise month-on-month decline in March and an increase in weekly jobless claims, demonstrating the effectiveness of the policy implemented by the Fed.
The Labor Department had released statistics on Wednesday showing that consumer prices (CPI) had recorded a sharper than expected slowdown in March over a month and on an annual basis.
“Markets rallied today after the inflation data came out this morning as it’s still all about the Fed and therefore inflation,” said David Carter, investment specialist at JPMorgan Private Bank.
“With consumer prices subdued yesterday, producer prices also suggest a slowdown in inflation, which could mean an early end to the Fed’s monetary policy tightening.”
Financial markets are betting on a final 25 basis point Fed rate hike in May after hikes of 475 basis points in total since March 2022, with the fed funds rate currently at 4.75%-5.00 %.
Investors are now turning their attention to financial releases from major US banks for the first quarter, with Citigroup, JPMorgan Chase & Co and Wells Fargo & Co due to report results on Friday.
Values, Delta Air Lines ended down, while its first quarter profit came in below analysts’ expectations.
Harley-Davidson also backtracked after announcing the departure of its chief financial officer, Gina Goetter, at the end of April.
Groupon rose after the announcement of the appointment of Jiri Ponrt as chief financial officer.
Netflix also ended higher after Wedbush indicated that the streaming platform’s revenue growth from new subscribers could boost profitability.
(Reporting Stephen Culp with contributions from Sruthi Shankar and Ankika Biswas; Camille Raynaud)
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