Wall Street’s indexes closed higher on Tuesday after plunging from intraday highs following the release of U.S. inflation data as investors turned their attention to the Fed meeting.
Slowing inflation raises expectations of smaller interest rate hikes from the central bank, which traditionally favors equity markets.
Against this backdrop, the Dow Jones Industrial Average closed up 105 points, or 0.31%, at 34,110. Intra-session he had reached to earn even 500 units. The technological Nasdaq strengthened by 1.01% to 11,256 points. The barometer S&P 500, for its part, rose 0.74% to 4,019 points.
Today’s rise is a result of positive news from the US inflation front, as the annual consumer price index slowed to 7.1% in November from 7.7% in October. In fact, this performance turned out to be better than forecasts, which placed the annual index at 7.3%.
Yesterday’s data, as is reasonable, come to confirm the expectations for tomorrow’s (Wednesday) decision of the American federal bank, i.e. the Federal Reserve, the focus of which is the level of interest rates.
According to traders’ bets, the Fed will intervene by 50 basis points and not 75, as happened the previous four times. This, if confirmed in practice, means that the American bank, after several months of frantic progress, will press the “brake” on the aggressive rate of monetary policy tightening.
Analysts, in fact, believe that the slowdown in interest rate growth is a first step in confirming the de-escalation of the inflationary phenomenon, while at the same time giving some “breathing space” to growth, which is traditionally hostile to increased interest rates.
