Market rallies on softer inflation data, Dow jumps more than 350 points

Market rallies on softer inflation data, Dow jumps more than 350 points

Stocks rose on Tuesday, boosted by encouraging inflation data and a renewed sense of optimism among investors. The Dow Jones Industrial Average rose more than 350 points, bringing the broader market closer to its all-time high.

The producer price index (PPI), a measure of wholesale inflation, came in lower than expected, boosting investor confidence and fueling expectations of a less hawkish monetary policy stance from the Federal Reserve. The positive PPI reading set the stage for Wednesday’s release of the consumer price index (CPI), a closely watched gauge of headline inflation.

The S&P 500 led the rally, gaining more than 1.5%, while the Nasdaq Composite jumped 2.2%. This marked a significant rebound from the previous week’s market volatility, as measured by the Cboe Volatility Index (VIX), which has since fallen below 20.

The technology sector was a standout performer, with Nvidia shares up more than 4%. Starbucks also surged, with its stock price rising more than 21% following the announcement of Brian Niccol as its new CEO.

Tuesday’s rally reflects growing belief among investors that inflationary pressures could ease, potentially paving the way for a more benign economic environment. However, market participants remain cautious, with the upcoming CPI report expected to provide further clarity on the inflation outlook and the Federal Reserve’s next moves.

By Anderson W. White

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