Wall Street soars at the open on milder inflation data

August 10, 2022: US stocks opened with big gains Wednesday cheered by the milder-than-expected US inflation data, as investors bet the data means the Federal Reserve will slow the pace of its aggressive interest rate hikes.

With energy costs dropping in recent weeks, the annual consumer price index dipped to 8.5% last month, the Labor Department reported, and there was no increase compared to June -- well below expectations.

Consumer prices soared 9.1% in June, the highest in 40 years, as consumers continued to spend amid global supply chain snarls, worker shortages and Russia's war on Ukraine.

"The market's initial response to this morning's data is exactly what one would expect. It borders on giddy," said Briefing.com analyst Patrick J. O'Hare.

About 45 minutes into the trading day, the Dow Jones Industrial Average was up 1.6% at 33,291.29.

The broad-based S&P 500 also advanced 1.6% to 4,187.33, while the tech-rich Nasdaq Composite Index rose 1.9% to 12,738.24.

"The stock market has battled back nicely from its mid-June lows, spurred in part by a belief that the Federal Reserve is going to pivot to a friendlier policy position sooner rather than later," O'Hare said.

The Fed has raised rates four times this year, including two consecutive three-quarter-point increases, and economists caution that another jumbo hike is still likely since inflation remains uncomfortably high despite the easing.

Among individual shares, Tesla shares were up 0.8 percent after Elon Must announced he had sold $7 billion of the company's stock.

Cryptocurrency exchange Coinbase Global was up 7% even after reporting a second quarter loss.

Meanwhile major tech stocks, including Netflix and Tesla, were also up.

AFP/APP