CPI Pushes Big Tech to Fresh Highs – US Market Wrap

Investors’ enthusiasm for US technology behemoths drove stocks higher Wednesday, snapping a two-day slide after a benign inflation report reinforced expectations that the Federal Reserve will continue to cut interest rates.

The Nasdaq 100 rose 1.9% to a record, while the S&P 500 rose 0.8%, approaching a recent high. Broadcom led the advance following a report that the chipmaker was working on an AI agreement with Apple. The so-called Magnificent Seven stocks were once again in the lead, with Amazon and Facebook parent Meta Platforms reaching new highs. Wall Street’s optimism comes despite inflation remaining stubbornly above the central bank’s target.

The consumer price index rose 0.3% in November for the fourth consecutive month, while core CPI, which excludes volatile food and energy costs, increased by the same amount, according to Bureau of Labour Statistics data released Wednesday. The core gauge, economists’ preferred number, increased 3.3% from the previous year, as expected.
Swaps traders expect a quarter-point interest rate cut at the December policy meeting, while bets on more than three cuts over the next year remain a key question. Treasury yields resumed their climb in the afternoon session, with the benchmark 10-year rising to 4.27%.

The dollar rose following reports that Chinese leaders are considering allowing their currency to weaken as they prepare for higher tariffs under a second Donald Trump presidency.