Stocks Soar, Yields Plunge as Cooler Inflation Fuels Fed Pause Bets
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US stocks rallied strongly on Tuesday after a cooler-than-expected inflation print signaled the Fed could be done raising rates. The Dow jumped over 450 points while the Nasdaq rose 2.4%.
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Gold prices jumped nearly 1% to around $1,968 an ounce, heading for its highest close since early November amid falling bond yields.
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Airfares and rental cars saw some of the biggest price drops in October, signs that the post-COVID travel boom is cooling. Food and rent remain stubbornly high.
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Bond yields saw their largest single-day drop since March, with the 10-year Treasury yield falling over 18 basis points to 4.4%. This shift could remove a headwind for stocks.
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Futures tied to the Dow, S&P 500, Nasdaq and Russell 2000 all jumped 1-3% following the cooler October CPI print, as markets bet the Fed could pause rate hikes.