Stock Market Fireworks on Card on Cooling Inflation & Gaza Deal
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US Bourses Rise on Earning & Easing Inflation Trails
By S Jha
New Delhi, January 16: The US stock exchanges sharply climbed while reacting to the easing of the inflation numbers. The US indices rose almost by two percentages in a strong comeback rally after days of losing streaks.
Stocks soared Wednesday as investors reacted to strong earnings reports from several large banks and inflation numbers that renewed hopes the Federal Reserve will cut interest rates in 2025. Dow Jones climbed by over 700 points on Wednesday.
The US consumer price index rose by 2.9 per cent in December. But the core inflation grew by 3.2 per cent to bring relief to economists. The decline in the core inflation added to expectations that the US Federal Reserve may come out with early rate cuts.
The core inflation in the US had been stuck at 3.3 per cent for the three months. The inflation had hit the bottom in September at 2.4 per cent last year in the US and since then it had been climbing up.
New Year Rings March of Bulls Pining Valuations in Stock Market
The Dow Jones gained 1.7 per cent. The Nasdaq Composite rose by 2.5 per cent. All the indices rose while tracking the cooling inflation numbers. The US bourses also gained on account of the financial stocks rising after good earning numbers by institutions.
While the US Federal Reserve has cut rates thrice, it had been hawkish in commentary over inflation. The stock markets had been in correction phase due to the spike in inflation.
The bulls smelt opportunities with the bond yields also cooling. The 10-year bond yield dropped to 4.64 per cent. The cooling of the bond yield brought cheers to the stock markets.
The global equity markets are also likely to react positively to the ceasefire deal between Israel and the Hamas in Gaza. After 15-month of blood trails in the Middle East in the aftermath of the October 7 attacks on Israel by the Hamas, US President Joe Biden announced the ceasefire deal in Gaza. Reports said that Israeli female soldiers will first walk free from the hostage of the Hamas on Sunday.
Biden announced the ceasefire and hostage deal between Israel and Hamas on Wednesday. “Today, after many months of intensive diplomacy by the United States, along with Egypt and Qatar, Israel and Hamas have reached a ceasefire and hostage deal. My diplomacy never ceased in their efforts to get this done,” Biden said while announcing the ceasefire deal.
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