Wall Street rises after inflation data

March 14 (Reuters) – U.S. stocks rose on Tuesday after U.S. consumer prices rose as forecast, bolstering expectations for a smaller Fed rate hike at its next meeting.

The US consumer price index in February amounted to 0.4% m/m, which was in line with economists’ expectations. In annual terms, consumer inflation fell to 6.0%, in line with forecasts.

Excluding food and energy prices, inflation was 0.5% m/m, while economists expected 0.4%. In annual terms, the base rate amounted to 5.5%, in line with economists’ forecast.

After the publication of the data, traders’ expectations for a 25 bp rate hike at the March meeting did not change, and the estimate of the probability of stopping rate hikes fell slightly to 17%.

“In light of the events over the weekend, there could not have been a better value (price index). This shows that inflation is moving in the way the Fed expected and wanted,” said Kim Forrest, chief investment officer at Bokeh Capital Partners.

“The Fed will not be too aggressive and will hurt the banks even more by raising interest rates.” Bank shares in the S&P 500 rose nearly 4% after posting the sharpest one-day percentage drop since June 2020 in the previous session. Meta Platforms Inc shares jumped 4.7% as the company announced it was cutting 10,000 jobs in a second round of mass layoffs.

Other tech giants and growth companies such as Apple Inc, Alphabet Inc and Tesla rose 1%-3.4%.

By 5:50 p.m. Moscow time, the Dow Jones index was up 1.44% to 32,278.38 points, the S&P 500 index was up 1.97% to 3,931.56 points, and the Nasdaq index was up 2.21% to 11,435.73 points .

Shares of Uber Technologies Inc and Lyft Inc rose 6% and 5.6%, respectively, after a California court ruled allowing app-based services to treat taxi drivers as independent contractors rather than full-time employees.

The original message in English is available at the code: (Shubham Batra and Amruta Khandekar in Bangalore featuring Shashwat Chauhan)


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