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Stock Market Today: Dow racks up gains as cooling inflation sinks Treasury yields

Published Nov 13, 2023 06:46PM ET Updated Nov 14, 2023 04:17PM ET
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Investing.com -- The Dow closed higher Tuesday as sliding Treasury yields paved the way for tech stocks to rack up gains after a cooler-than-expected inflation report supported investor expectations that the Federal Reserve's hiking cycle has ended.

By 16:00 ET (21:00 GMT), the Dow Jones Industrial Average was up 489 points or 1.4%, while the S&P 500 was up 1.9% and the NASDAQ Composite was up 2.4%.

U.S. October consumer inflation cools more than expected, pushing Treasury yields lower

The consumer price index in October slowed to a reading of 0% from 0.4% the prior month that was above economists expectations for a reading of 0.1%. The slowing than expected reading, added to expectations that the Federal Reserve isn’t likely to raise interest rates again.

“October CPI was soft on the services side, and a November print like this would not meet the bar we previously set for an additional hike in December,” Morgan Stanley said in a note on Tuesday. “We think soft inflation and still tight financial conditions will keep the Fed on hold,” it added.

Traders now expect the Fed to keep rates hold and deliver a first rate cut in May, according to Investing.com’s Fed Rate Monitor Tool.

Treasury yields fell sharply on the report, with the yield on 2-year Treasury falling  21 basis points to 4.832%, while the yield on the 10-year Treasury dropped 18 basis points to 4.455%.

These gains followed the release of data showing headline inflation in the U.S. slowed by more than expected in October, in a boost for Federal Reserve officials keen on corralling price pressures in the world's largest economy.

Tech, chip stocks shine on falling Treasury yields

Big tech was led higher by Alphabet (NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META) as sentiment on growth sectors of the market was supported by dip in Treasury yields.  

A more than 3% rise in chip stocks, meanwhile, also supported the broader tech sector amid a surge in Globalfoundries Inc (NASDAQ:GFS), Novanta Inc (NASDAQ:NOVT), and Marvell Technology Inc (NASDAQ:MRVL), with latter rallying on positive remarks from Wall Street. 

RothMKM started coverage on Marvell Technology at buy with a $60 price target, saying the chipmaker is "well positioned" to benefit from AI.

Home Depot kicks off earnings for big-box retailers with Q3 beat

Home Depot (NYSE:HD) rose more than 5% after the retailer reported Q3 results that topped Wall Street estimates including a smaller-than-anticipated 3.1% decline in third-quarter comparable sales as customers undertook more modest projects and home repairs. The retailer also narrowed its full-year outlook, now expecting sales to fall by 3% to 4% from the prior year, compared with a previous expectation of a 2% to 5% decline.

Target (NYSE:TGT) follows with its earnings on Wednesday, while Walmart (NYSE:WMT) and Macy’s (NYSE:M) are scheduled to release their results on Thursday.

Electric vehicle maker Fisker Inc (NYSE:FSR) reported disappointing earnings and said it would delay its quarterly regulatory filing, sending its shares 18% lower.

Energy stocks lag broader move higher despite gains in oil

Energy stocks were up less than 1%, lagging the broader market move higher despite rising oil prices amid a stronger demand outlook.

The IEA, in its monthly report, lifted its 2023 growth forecast to 2.4 million barrels per day from 2.3 million, and 930,000 barrels per day from 880,000 in 2024.

The agency, however, was careful to point to an expected deceleration in economic growth in nearly all major economies next year, but said its expectations were underpinned by hopes of interest rate cuts and the recent fall in crude prices.

The Organization of the Petroleum Exporting Countries had also slightly raised its 2023 forecast for growth in global oil demand, in its monthly report, released on Monday.

(Liz Moyer, Peter Nurse, and Oliver Gray contributed to this story.)

Stock Market Today: Dow racks up gains as cooling inflation sinks Treasury yields
 

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Comments (56)
Gary Piccone
Gary Piccone Nov 14, 2023 8:48PM ET
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I still don't trust the government data
dim dim
dim dim Nov 14, 2023 7:32PM ET
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'more than 90% of Japanese government bonds are in the hands of Japanese savers and investors' of U.S.A ;;;
dylan mulvaney
dylan mulvaney Nov 14, 2023 7:00PM ET
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Bidenomics isn't working, the Fed had to push interest rates from 0% to over 5% just to reduce inflation from 9% last year to 4% this year while mortgage rates are still at 8% and the average US household is living paycheck to paycheck and paying 50-100% more for daily necessities and housing.
Casador Del Oso
Casador Del Oso Nov 14, 2023 7:00PM ET
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The truth hurts.
dylan mulvaney
dylan mulvaney Nov 14, 2023 6:58PM ET
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Bidenomics is working! At causing 9% inflation and then having people celebrate 4% after pushing consumer debt to record levels and mortgage rates go up 300% from 2% to 8%.
Maximus Maximus
Maximus Maximus Nov 14, 2023 6:49PM ET
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Bidenomics is working.
Ricardo Diogo
Rcd72 Nov 14, 2023 5:52PM ET
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core CPI is at 4% and headlines is BS?
dim dim
dim dim Nov 14, 2023 5:35PM ET
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opinion: if I were the president of the USA, regarding the debt of about 33 trillion dollars, which is rising and is impossible to overcome, and in order not to play hide and seek (like small children) the USA is almost officially bankrupt, I would propose the BITCOIN to become an official currency, which would be used for the US debt. *another bailout for US debt, (not painful for citizens), probably does not exist,  *and the US dollar to be used for domestic & inernational commercial transactions.!!
First Last
First Last Nov 14, 2023 5:35PM ET
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The Trump admin taught Americans that Biden can just mint a $trillion coin.  Problem solved.
Tre Hsi
Tre Hsi Nov 14, 2023 5:35PM ET
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you think US is the only country with a large national debt?  have you checked out the govt debt level in Japan or Italy?  I would add China to that list if only we actually have accurate data about its debt level.....
Mitchel Pioneer
Mitchel Pioneer Nov 14, 2023 5:17PM ET
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Biggest investment JOKE on earth.
TheLast LoserDon
TheLast LoserDon Nov 14, 2023 5:17PM ET
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love a great joke!
Ac Tektrader
Ac Tektrader Nov 14, 2023 5:14PM ET
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as I posted Las summer. I expecedt the inflationary cycle to dip below 3% by years end.
dylan mulvaney
dylan mulvaney Nov 14, 2023 4:45PM ET
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90% of the US population disapproves of the economy right now, over 50% of Americans are living paycheck to paycheck, mortgage rates are at 8% which is causing the housing market to collapse, the average American household is paying 50-100% more for the basic living necessities compared to when Biden first took office. Trump is currently polling higher now that at any point in 2020. Record consumer debt, creditor card debt, outflows from 401ks. The US national debt is costing taxpayers over 1/2 trillion per year right now. The Fed might be prop'ing up the stock market with fake liquidity as P/E's go through the roof at levels not since since the last market collapse, but reality is there have been more bank crashes this year than the total number of brank crashes during the 2008 crisis.
Daniel Suarez
Daniel Suarez Nov 14, 2023 4:45PM ET
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Sounds like rhetoric to me. Are you part of these stats?
dylan mulvaney
dylan mulvaney Nov 14, 2023 4:45PM ET
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Daniel Suarez  Anybody has access to those statistics if you get your news from any sources other than CNN.
 
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