November CPI in Line with Expectations, Small Rate Cut Expected This Month
NVIDIA Up 3.3%... Alphabet and Tesla Surge 4%
On the 11th (local time), the Nasdaq index showed strength, surpassing the 20,000 mark for the first time ever. After last month's Consumer Price Index (CPI) increase met market expectations, investors have taken the Federal Reserve's (Fed) rate cut this month as a given, causing tech stocks to soar.
As of 2:51 PM in the New York stock market, the tech-heavy Nasdaq index was trading at 20,028.49, up 1.73% from the previous trading day. The large-cap S&P 500 index rose 0.86% to 6,086.8, while the blue-chip Dow Jones Industrial Average (Dow) was down 0.02% at 44,239.84.
According to the U.S. Department of Labor, last month's CPI rose 0.3% month-over-month and 2.7% year-over-year. These increases were each 0.1 percentage points higher than October's rates (2.6% year-over-year, 0.2% month-over-month), but all were in line with market expectations. With inflation not surging significantly last month, Wall Street is confident that the Fed will cut rates by 0.25 percentage points this month.
According to the Chicago Mercantile Exchange (CME) FedWatch, the federal funds futures market is pricing in a 94.9% probability that the Fed will cut rates by 0.25 percentage points at the Federal Open Market Committee (FOMC) meeting scheduled for the 17th-18th. The probability of holding rates steady is 5.1%.
Fueled by expectations of a rate cut this month, big tech stocks are rising in unison. AI leader Nvidia is up 3.25%. Alphabet, Google's parent company, has jumped 4.08%, and Tesla is surging 4.43%.
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