(New York) The indices on the New York Stock Exchange concluded Thursday on a historic jump, the NASDAQ flying more than 7%, celebrating a slowdown in US inflation.
According to final results, the Dow Jones index gained 3.70% to 33,715.37 points, the broader S&P 500 index, the most representative of the American market, climbed 5.53% to 3956.37 points, its best day since April 2020 at the start of the COVID-19 pandemic in the United States.
As for the technology-dominated NASDAQ, it posted a dizzying jump of 7.35% to 11,114.15 points.
“In my entire career, I don’t remember seeing the NASDAQ take off more than 7%. It’s huge, ”testified for AFP Peter Cardillo, analyst for Spartan Capital Securities and broker on Wall Street for fifty years.
“It seems that inflation has peaked, it’s all there,” he added, stressing how all the markets had reacted strongly to the good news of inflation which finally seems to be easing.
“We are witnessing a huge decline in bond rates, a surge in the stock market and a sharp retreat of the dollar”, commented Mr. Cardillo, while even oil prices recovered on the announcement of the figure of the inflation, interpreted as an incentive for energy demand.
US inflation slowed in October, more than expected, to 7.7% year on year, according to the CPI index, from 8.2% in September, falling to its lowest level since January 2022.
This slowdown could be a sign that the measures taken by the American central bank, the Fed, to bring inflation back into line by drastically raising the cost of money, are finally starting to bear fruit.
“The conclusion that we draw from this report is that the Fed will ease off on its monetary tightening,” summarized John Kilduff of Again Capital. For Peter Cardillo, this jump in the indices could mean “the end of the ‘bear market’ or bear market”.
On the bond market, rates on 10-year bonds tumbled to 3.82% from 4.09% the day before, the biggest drop in a session for ten years. These rates, which react to the prospect of a rate hike by the Fed, were at their lowest in more than a month.
In their wake, the dollar plunged. The dollar index, which compares the greenback to a basket of currencies, slid 2.56% to 107.77 points at 4:20 p.m., the lowest in almost three months.
On the foreign exchange market, Brad Bechtel of FX Jefferies put a damper on this enthusiasm: “the markets are overreacting a little […] since it is a single piece of data on inflation”.
On the side, the megacaps of the NASDAQ were at the party sporting impressive rises like Meta, parent company of Facebook (+10.25% to 111.87 dollars), Apple (+8.90% to 146.87 dollars ), Amazon (+12.18% to 96.63 dollars) or even Alphabet, parent company of Google (+7.75% to 94.17 dollars).
Inflation news overshadowed concerns in the cryptocurrency sector after the FTX exchange debacle. The Coinbase platform resumed colors as did the brokerage application Robinhood, which gained more than 10%.
All sectors of the S&P posted very strong growth, starting with information technology (+8.33%), followed by the real estate sector (+7.74%).
The Toronto Stock Exchange jumped nearly 650 points on Thursday, buoyed by a broad-based rally, as major U.S. indexes also climbed on the heels of data release showing a slowdown in U.S. inflation in October.
The Toronto Stock Exchange’s S&P/TSX Composite Index rose 646.11 points, or 3.34%, to end the day at 19,990.36 points.
In the currency market, the Canadian dollar traded at an average rate of 74.75 cents US, up from 74.18 cents US on Wednesday.
On the New York Commodities Exchange, crude oil rose 64 cents to US$86.47 a barrel and natural gas rose 37 cents to US$6.24 per million BTU.
The price of gold rose US$40.00 to US$1753.70 an ounce and that of copper advanced 6 cents US to US$3.76 a pound.
With The Canadian Press