A better-than-expected inflation report sends stocks surging

By Paul R. La Monica and Alicia Wallace, CNN Business

Updated 7:27 PM ET, Thu November 10, 2022
18 Posts
Sort byDropdown arrow
4:07 p.m. ET, November 10, 2022

Stocks soar in best day since 2020 after new data shows inflation eased

From CNN Business' Nicole Goodkind

A trader works at the New York Stock Exchange on Thursday, Nov. 10.
A trader works at the New York Stock Exchange on Thursday, Nov. 10. (Seth Wenig/AP)

US stocks posted their best day since 2020 on Thursday after new government data showed that price increases eased in October.

Investors cheered the development as an indication that the Federal Reserve’s interest rate hikes may finally be cooling inflation.

The Dow rose 1,203 points, or 3.7%. The S&P 500 was up 5.5% while the Nasdaq Composite was 7.3% higher.

That marked the biggest point gain for the Dow and also the biggest percentage jumps for the S&P and Nasdaq since spring 2020.

The Consumer Price Index, a key inflation gauge, rose 7.7% for the year ending in October. Although that is still uncomfortably high, it is down from 8.2% in September and well below analyst estimates of 8%. It is also the smallest year-over-year increase for CPI since a 7.5% jump in January.

Wall Street is hoping that the data will help convince the Fed to pull back on the size and pace of its next interest rate increases, which investors fear could send the economy into a recession. Fed funds futures are now pricing in about an 85% chance of a half-point increase, as opposed to three-quarters of a percentage point, at the central bank’s December 14 meeting. That's up from roughly 57% on Wednesday.

As stocks settle after the trading day, levels might still change slightly.

2:26 p.m. ET, November 10, 2022

The Fed will probably ease up a bit after today's inflation report, former NY Fed president says

From CNN Business' Matt Egan

Bill Dudley speaking during the Bank of England Markets Forum in London in 2018.
Bill Dudley speaking during the Bank of England Markets Forum in London in 2018. (Victoria Jones/Pool/AFP/Getty Images)

Former New York Federal Reserve President Bill Dudley today told CNN that the better-than-expected inflation report will help the Fed take its foot off the rate-hike gas just a bit.

“It certainly was better news and makes it even more likely that the Fed can step down to 50 basis points next month (which is their strong preference)," Dudley said.

But Dudley noted it's just one report, and some measures like the median Consumer Price Index (calculated by the Cleveland Fed) only show a plateauing of prices at 7% growth over the past year -- not an easing of annual inflation like the overall index showed.

More importantly, Dudley said, the Fed has not generated any meaningful increase in labor market slack. 

"So [it's] a better reading that has generated a relief rally, but doesn’t change the picture in a significant way (as most monthly reports don’t)," he noted.

2:05 p.m. ET, November 10, 2022

Nasdaq soars more than 6% as tech leaders surge

From CNN Business' Paul R. La Monica

It was a tech-tastic day on Wall Street Thursday. Sure, the entire stock market rallied sharply on the news that inflation pressures are slowing. But it was the tech sector, one of the hardest hit groups this year, that really took off.

The Nasdaq was up more than 6% in mid-afternoon trading, it's biggest jump since April 2020. Salesforce (CRM), Apple (AAPL), Microsoft (MSFT) and Intel (INTC) were among the leaders in the Dow, which surged nearly 1,000 points, or 3%.

Tech helped boost the S&P 500 by 4.6% as well. Among the bigger winners? Online retailers Amazon (AMZN) and Etsy (ETSY), software companies Autodesk (ADSK) and Ceridian (CDAY) and chip giants AMD (AMD) and Nvidia (NVDA). All of these stocks were sporting double-digit percentage gains.

Whether or not the worst is over in Silicon Valley remains to be seen though. Many big tech firms are starting to lay off workers. And the Nasdaq is still in a bear market. It's down 30% this year.

2:23 p.m. ET, November 10, 2022

FTX founder issues public apology as company verges on collapse

CNN Business' Allison Morrow

Sam Bankman-Fried, founder and CEO of FTX, a cryptocurrency exchange, photographed during an interview in New York in August.
Sam Bankman-Fried, founder and CEO of FTX, a cryptocurrency exchange, photographed during an interview in New York in August. (Jeenah Moon/Bloomberg/Getty Images)

Sam Bankman-Fried, the crypto entrepreneur whose FTX exchange has been in a death spiral this week, tweeted a candid apology Thursday morning.

“I’m sorry. That’s the biggest thing. I f**ked up, and should have done better,” Bankman-Fried said in a lengthy Twitter thread.

The FTX founder went on to say that the exchange’s affiliated hedge fund, Alameda Research, would wind down trading while FTX focuses on boosting liquidity — “every penny” of which would go to helping make customers and investors whole, he said.

Alameda is at the heart of Bankman-Fried’s crypto empire, and questions about its financial stability kicked off a flurry of withdrawals over the weekend. On Sunday alone, Bankman-Fried said, FTX was hit with $5 billion in withdrawals.

The near-collapse of FTX, one of the largest cryptocurrency exchanges, has sent shockwaves throughout the crypto industry, which was already being battered by higher interest rates and recession fears.

1:04 p.m. ET, November 10, 2022

This is the moment Wall Street has been waiting for

From CNN Business' Paul R. La Monica

Traders working on the floor at the New York Stock Exchange today.
Traders working on the floor at the New York Stock Exchange today. (Seth Wenig/AP)

Stocks soared Thursday after new economic data showed that price increases eased in October. Investors cheered the development because it indicates the Federal Reserve’s interest rate hikes may finally be cooling inflation.

The Dow gained roughly 1,000 points, or 3.1%, in midday trading. The S&P 500 was up 4.7% while the Nasdaq Composite was 6.3% higher.

Meanwhile, the 10-year Treasury yield tumbled below the threshold of 4%, to about 3.87%, its lowest level since mid-October. The direction of the 10-year bond yield impacts mortgage rates as well as rates for several other types of consumer and business loans. And the 10-year itself is influenced by short-term interest rates set by the Fed.

Wall Street is hoping that the data will help convince the Fed to pull back on the size and pace of its interest rate increases, which investors worry could send the economy into a recession. Fed funds futures are now pricing in about an 80% chance of a half-point increase, as opposed to three-quarters of a percentage point, at the central bank’s December 14 meeting.

Read more

11:49 a.m. ET, November 10, 2022

Stocks soar after better-than-expected inflation data

CNN Business' Anjali Robins

Stocks soared in midday trading after new economic data showed that price increases eased in October. Investors cheered the development because it indicates the Federal Reserve's interest rate hikes may finally be cooling inflation. 

The Dow gained 993 points, or 3.1%, in midday trading.

The S&P 500 was up 4.6% while the Nasdaq Composite was 6% higher. 

11:30 a.m. ET, November 10, 2022

Here's what's getting more expensive at the grocery store

From CNN Business' Danielle Wiener-Bronner

Shoppers are seen in a Kroger supermarket on October 14 in Atlanta, Georgia.
Shoppers are seen in a Kroger supermarket on October 14 in Atlanta, Georgia. (Elijah Nouvelage/AFP/Getty Images)

Food is still getting more expensive, but at a slower pace than earlier this year.

In the month of October, food was 0.6% pricier compared to September, adjusting for seasonal swings, according to data released Thursday by the Bureau of Labor Statistics.

For the year through October, without seasonal adjustments, food got 10.9% more expensive, with groceries increasing 12.4% and restaurant prices jumping 8.6%.

The increases are less than the record highs clocked just a few months ago, but food prices are still outpacing the overall rate of inflation, which hit 7.7% for the year.

The Federal Reserve has been attempting to curb inflation by raising interest rates, but that doesn't do much for grocery and restaurant prices.

10:52 a.m. ET, November 10, 2022

US stocks open higher after inflation report comes in light

From CNN Business' Nicole Goodkind

Specialist traders working at the New York Stock Exchange on November 9.
Specialist traders working at the New York Stock Exchange on November 9. (Brendan McDermid/Reuters)

US stocks surged Thursday morning after a key inflation reading buoyed investors' hopes that price increases had peaked. 

The Consumer Price Index, which measures inflation in the US, grew 7.7% in October from a year ago. That’s down from 8.2% in September and marks the lowest annual increase since January. 

The easing of prices gave investors hope that the Federal Reserve may soon pivot away from its current regime of aggressive interest rate hikes to fight inflation. 

The Dow gained 793 points, or 2.4%, on Thursday morning.

The S&P 500 was up 3.5%.

The Nasdaq Composite was 4.8% higher. 

9:56 a.m. ET, November 10, 2022

10-year Treasury yield dips below 4% after CPI

From CNN Business' Paul R. La Monica

Possible good news for people still looking to buy a home and lock in a mortgage? The yield for the benchmark long-term US government bond fell sharply Thursday after the government reported a slowdown in a key inflation rate.

The 10-year Treasury yield tumbled below the psychologically important threshold of 4% to about 3.87%. That's its lowest level since mid-October.

The direction of the 10-year bond yield impacts mortgage rates as well as rates for several other types of consumer and business loans. And the 10-year itself is influenced by short-term interest rates set by the Federal Reserve.

Investors are hoping that the Fed may be soon be able to slow its historic pace of interest rate hikes given the pullback in consumer price increases. But the 10-year has a long way to go before it's anywhere near where it started the year. Yields were at a little more than 1.5% at the beginning of 2022.