Better Inflation, Wall Street Up Thanks To Positive Sentiment

Wall Street (Photo: Reuters via ANTARA)

JAKARTA - Wall Street strengthened positive sentiment at the end of trading Friday (Saturday morning WIB), extending the rally that began the day before after the weak inflation rate raised hopes the Federal Reserve (Fed) would become less aggressive with the increase in interest rates.

The Dow Jones Industrial Average increased by 32.49 points or 0.10 percent, to settle at 33,747.86 points. The S&P 500 index rose 36.56 points or 0.92 percent, ending at 3,992.93 points. The Nasdaq Composite Index rose 209.18 points or 1.88 percent, to close at 11,323.33 points.

Quoted from ANTARA, six of the 11 main S&P 500 sectors ended up in positive areas, with the energy and communication sectors surging 3.06 percent and 2.48 percent, respectively, surpassing other sectors. Meanwhile, the healthcare sector fell 1.28 percent, a group with the worst performance.

For this week the Dow Jones Index rose 4.1 percent, the S&P 500 Index jumped 5.9 percent and the Nasdaq Index soared 8.1 percent. This is the biggest weekly increase in S&P 500 since June and Nasdaq's biggest weekly increase since March.

The market reaction above comes as encouraging signs in US inflation raise expectations for a less aggressive rate hike from the Federal Reserve.

Data released Thursday (11/10/2022) shows the core and primary consumer price index for October rose lower than expected, pushing annual inflation down from the previous month.

The year-on-year inflation rate slowed to 7.7 percent for main reading, from 8.2 percent in September. The core inflation rate slowed to 6.3 percent in October year-on-year from 6.6 percent in the previous month.

"What we really saw today was just a follow-up to yesterday. There was a lot of money stored outside the re-entry market," said Ingalls & Snyder Senior Portfolio Strategy Expert Tim Ghriskey in New York as quoted by Reuters.

Investors expect an 81 percent chance for a 50 basis point interest rate increase in December and a 19 percent chance for a 75 basis point increase, according to the CME Fedwatch tool.