Wall Street advances on expectations for rates after inflation data

The three main indices of Wall Street They advance strongly on Tuesday. The purchases are encouraged by a sharp drop in Treasury bond yields and by bets on the moderation of rate hikes due to less inflationary pressure.

This morning the Labor Department announced that November inflation moderated to 7.1% year-on-year from a record of 7.7% in October. The variation was also lower than the figure expected by the analyst consensus, which was 7.3 percent.

the main index Dow Jones, made up of the shares of 30 industrial giants, moves 0.68%, to a level of 34,237.31 units. The S&P 500, of 500 components, advances 1.44% to 4,048.14 points. The index Nasdaq rises 2.06% to 11,383.33 points.

The market discounts that the Federal Reserve will raise interest rates by 50 base points tomorrow, after four consecutive increases of 75 base points. The inflation data improves the bets for the following increases and the terminal rate of the cycle.

“The report [de inflación] This month confirms that there is a decline in inflationary pressures from October and is good news for the Federal Reserve,” Morgan Stanley strategists wrote in a note to clients for today’s opening.

Large technology companies, sensitive to high interest rate environments, stand out with strong gains. Apple shares rise 2.41%; those of Microsoft, 3.05%; Alphabet, 4.59% Meta Platforms, 6.01 percent. On the contrary, Tesla falls 3.20 percent.

jose.rivera@eleconomista.mx