Stocks are on the move Tuesday after Commerce Department data showed a fifth consecutive monthly decline in headline inflation.
Updated at 8:46 am EST
U.S. inflation slowed for a fifth consecutive month in November, data from the Bureau of Labor Statistics indicated Tuesday, sparking hopes of a pivot in the Federal Reserve‘s rate plans and trigger another massive move higher for U.S. stocks.
The headline consumer price index for the month of November was estimated to have risen 7.1% from last year, down from the 7.7% pace recorded in October and well south of the Street consensus forecast of 7.3%.
On a monthly basis, inflation was up 0.1%, the BLS said, compared to a 0.4% reading in October. Street forecasts had projected a 0.3% acceleration.
So-called core inflation, which strips-out volatile components such as food and energy prices, rose 0.2% on the month, and 6.`% on the year, the report noted, with both the annual and monthly reading coming firmly below Street forecasts.
On Wall Street, U.S. stocks reacted sharply to the softer-than-expected readings, with futures tied to the S&P 500 indicating an opening bell gain of 105 points while those linked to the Dow Jones Industrial Average surged 705 points. The tech-focused Nasdaq was called 4255 points higher.
Benchmark 10-year Treasury note yields fell 10 basis points to 3.447% while 2-year notes dropped 17 basis points to 4.229%. The U.S. dollar index, which tracks the greenback against a basket of its global peers, fell 1.11% to 103.931.
The CME Group’s FedWatch is pricing in an 86.6% chance of a 50 basis point Fed rate hike tomorrow in Washington, up from 72.5% prior to the data release, with just a 13.4% chance for a fifth consecutive 75 basis point hike.
