US Stocks Rally After Surprising CPI Data Release

Market Surge Amid Inflation Data Surprise: Bitcoin's Rally and Oracle's Success Highlight Market Dynamics

Mar 12, 2024 - 10:02
Mar 12, 2024 - 10:03
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US Stocks Rally After Surprising CPI Data Release
US Stocks Rally After Surprising CPI Data Release

US stocks surged on Tuesday following the release of unexpected inflation data, providing insight into the Federal Reserve's potential interest rate adjustments. The S&P 500 climbed by 0.5%, with the Nasdaq Composite rising approximately 0.7%, rebounding from two consecutive days of losses. The Dow Jones Industrial Average also saw an uptick of about 0.3%.

Inflation Data Surprises Analysts

Investors closely analyzed the release of the Consumer Price Index (CPI), a critical factor influencing the Fed's policy decisions. While headline inflation met expectations with a 0.4% increase in February, the core CPI, which excludes food and energy prices, exceeded estimates with a 0.4% monthly rise and a 3.1% annual gain.

Market analysts view the CPI data as significant, as Fed policymakers have expressed the need for evidence of easing inflation before considering rate adjustments. Prior to the CPI release, S&P 500 traders were hedging potential stock moves of 0.9% in either direction.

Bitcoin's Record-Breaking Rally Continues

Meanwhile, Bitcoin continued its remarkable rally, surpassing $72,200. The cryptocurrency has experienced a surge in inflows, driving its value up by almost 70% since the beginning of the year. Bullish investors predict Bitcoin could reach as high as $350,000 by the end of the year.

Oracle Shares Soar on Cloud Computing Progress

In corporate news, shares of Oracle jumped by 12% in early trading. The surge followed indications that the tech giant is making strides in cloud computing, notably through a partnership with AI chip giant Nvidia.

Market Outlook Despite Inflation Concerns

Despite concerns over inflation, markets opened higher on Tuesday. The S&P 500 and Nasdaq Composite both recorded gains of 0.5% and 0.7% respectively, while the Dow Jones Industrial Average ticked up by 0.3%.

Persistent Inflation Challenges

Inflation pressures persisted in February, driven by increases in shelter and gas prices. The CPI rose by 0.4% compared to the previous month and by 3.2% compared to the previous year. On a "core" basis, which excludes food and gas costs, prices climbed by 0.4% month-over-month and by 3.8% year-over-year.

Factors Behind Apple's Stock Performance

Apple's stock performance has faced challenges in recent weeks, with shares declining by 8.5%. Analysts point to several factors contributing to the sell-off, including concerns about AI plans, slowing demand in China, and regulatory uncertainties surrounding the tech giant.

Also Read: Wall Street Analysts Brush Off Stock Bubble Fears Amid Magnificent 7's Surge

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