Stocks rose on Thursday as traders anticipated that the latest reading of a key consumer inflation gauge won’t stand in the way of the Federal Reserve lowering its benchmark interest rate next week.
The Dow Jones Industrials darted higher 593.36 points, or 1.3%, to 46,085.39.
The S&P 500 gained 54.1 points to 6,586.14.
The NASDAQ index found strength and rocketed 156.24 points to 22,042.23.
It was a confusing batch of numbers, with the consumer price index reading for August coming in hotter than expected on a monthly basis but in line with expectations on an annual basis.
The CPI reading showed an increase of 0.4% for the month, according to the Bureau of Labor Statistics, higher than the 0.3% that economists polled by Dow Jones were expecting. However, the index recorded 2.9% on a 12-month basis, as expected.
Additionally, so-called core CPI, which excludes volatile food and energy, increased 0.3% in August and 3.1% from a year ago. Both were in line with the Dow Jones forecasts.
The report comes a day after the producer price index showed an unexpected decline of 0.1% on the month. The PPI rose 2.6% on a 12-month basis.
Also on Thursday, weekly jobless claims saw a surprise jump. The figure for the week ended Sept. 6 increased 27,000 from the previous period to a seasonally adjusted 263,000. That’s more than the 235,000 that was penciled in.
Traders still generally expect that the Fed will cut rates by a quarter percentage point on Sept. 17.
Thursday’s gain was broader than recent sessions, with banks like JPMorgan and consumer names like Walmart in the green on expectations for lower rates.
Prices for 10-year Treasury eked up, lowering yields to 4% from Wednesday’s 4.04%. Treasury prices and yields move in opposite directions.
Oil prices dropped $1.25 to $62.42 U.S. a barrel.
Gold prices sagged $4,50 to $3,677.50 U.S. an ounce.
