[New York Stock Market] US Inflation Slowdown Leads to Gains... Nasdaq Posts Largest Quarterly Rise in 3 Years

The New York stock market closed higher across the board following news that U.S. inflation indicators slowed more than expected. The Nasdaq index rose more than 16% in the first quarter, marking its largest quarterly gain in three years.

On the 31st (local time) at the New York Stock Exchange, the Dow Jones Industrial Average closed at 33,274.15, up 415.12 points (1.26%) from the previous day.

The Standard & Poor's (S&P) 500 index rose 58.48 points (1.44%) to 4,109.31, while the Nasdaq index closed up 208.44 points (1.74%) at 12,221.91.

Notably, the Nasdaq index increased by 16.8% during the first quarter of this year. This is a remarkable rise compared to the Dow Jones' 0.4% and the S&P 500's 7% gains over the same period. The Nasdaq's first-quarter gain is the largest in over three years since June 2020.

Investors focused on inflation indicators that influence whether the U.S. Federal Reserve (Fed) will raise interest rates further. The inflation data released that day showed a slight slowdown compared to the previous month.

The February Personal Consumption Expenditures (PCE) price index rose 5.0% year-over-year, slightly lower than the 5.3% increase in January. The February U.S. core PCE price index, which excludes volatile energy and food prices, rose 4.6% year-over-year. This figure is lower than both experts' expectations and January's 4.7% reading.

Personal income and consumer spending also slowed. Personal income in February increased by 0.3% month-over-month, a lower growth rate than January's 0.6%. Consumer spending in February rose by 0.2%, down from 2% in January.

As banking sector concerns ease, the market is reflecting expectations of additional interest rate cuts. Although the Fed has declared there will be no rate cuts this year, the market is focusing on inflation, slowing consumption, and economic downturns, fueling hopes for rate reductions.

The market is also paying attention to the fact that the amount of loans U.S. banks have received from the Fed is decreasing. According to the Fed, during the week of the 23rd to the 29th, U.S. banks borrowed $152.6 billion from the Fed, a 6.9% decrease from the previous week.

As a result, major bank stocks and tech stocks all rebounded. Shares of the four major U.S. banks rose simultaneously, and big tech stocks such as Apple and Microsoft also increased. However, electric truck maker Nikola fell more than 14% following news of a capital increase.