Inflation remains stubbornly high as stocks rally

US markets rise after unexpected decline in early trade on Thursday hot inflation report Strengthened the Federal Reserve’s position on the need for more aggressive interest rate hikes.

As of 11:20 a.m. Eastern Time, the S&P 500 was up 4 points, or 0.1%, at 3,581. The Dow Jones Industrial Average rose 114 points, or 0.4%, and the Nasdaq Composite rose 0.4%.

The S&P 500 is down 26% this year and is near a two-year low.

“The Federal Reserve is not only going to raise rates by 75 bps next month, but it is now likely that they will raise rates by another 75 bps in December,” predicted Chris Zacarelli, chief investment officer at the Independent Advisor Alliance.

Minutes from the Fed’s last meeting, released on Wednesday, outlined the central bank’s commitment to controlling “unacceptably high” inflation.

“A sharp reaction to the data could put more pressure on stocks,” said ActiveTrades’ Anderson Alves in a report.

The September retail sales figures to be released Friday can give a clearer picture of where prices are highest and how Americans are reacting.

El-Erian: “We are in this incredible situation where good news for the economy is bad news for the markets”


The Fed and other central banks in Europe and Asia have raised rates by unusually large margins to quell inflation, which is at a multi-decade high, but traders fear they will push the global economy into recession. can go.

“Although inflation is still very high, and core inflation is at a new generation high, the Fed is unlikely to increase its rate hikes,” Bill Adams, chief economist at Comerica Bank, said in a report.

Shares of Delta Air Lines gained more than 4% after reporting third-quarter profit of $695 million. Atlanta-based Delta said there’s more to a lucrative credit-card business this summer than higher average fares and rising fuel costs. The airline expects revenue to be above pre-pandemic levels during the last three months of the year.

back to the dollar

In energy markets, benchmark US crude rose 13 cents to $87.40 a barrel in electronic trading on the New York Mercantile Exchange.

On Wednesday, the dollar fell back to 146.68 after hitting a 24-year high of 145.85.

The dollar’s exchange rate is rising against other currencies due to the Fed’s rate hike and fears of a recession. The yen’s weakness has prompted hopes that Japan’s central bank may intervene a second time to raise the exchange rate, following an intervention in September.

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