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

AuthorYasin Ebrahim
Published 11/13/2023, 06:46 PM
Updated 11/14/2023, 04:17 PM
© Reuters.

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.

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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.

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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.)

Latest comments

I still don't trust the government data
'more than 90% of Japanese government bonds are in the hands of Japanese savers and investors' of U.S.A ;;;
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.
The truth hurts.
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%.
Bidenomics is working.
core CPI is at 4% and headlines is BS?
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.!!
The Trump admin taught Americans that Biden can just mint a $trillion coin.  Problem solved.
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.....
Biggest investment JOKE on earth.
love a great joke!
as I posted Las summer. I expecedt the inflationary cycle to dip below 3% by years end.
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.
Sounds like rhetoric to me. Are you part of these stats?
 Anybody has access to those statistics if you get your news from any sources other than CNN.
"90% disapproval rating on the economy" is false.  An August 2023 Associated Press-NORC Center for Public Affairs Research poll found 36% approve of Biden’s handling of the economy.  And "most people" during Biden's inauguration paid  "more for their costs of daily living compared to just when" Trump "first took office, including food, gas, rent/mortgage."
everyone is complaining about how broke they are. nonsense! if you just invested in Nvidia 2 weeks ago you would have made over 20%!! stop complaining and start buying
2 weeks ago bears & retrumplcians were predicting a deep crash.  They still are.
maga-losers will be maga-losers..
Core inflation is at 4.0%, which is double the target despite all current interventions and the housing market collapse in progress due to 8% interest rates. The US government has over half a trillion in interest payments alone now due to all the money that has been printed.
Although I welcome good news making the market go up, it is again an overreaction, since, although regular CPI (that includes volatile items like food and energy) went down substantially, core inflation went down much less and it is the thing that the fed cares about because that is what is affected by their rate setting.
  "just not as fast" is what the Fed wants.
Sounds like double talk. The kind Joe does.
Casador, why aren't you more concerned wit Trump's doublespeak lies and threats of violence.
There is currently a 90% disapproval rating on the economy right. Most people are paying 50-100% more for their costs of daily living compared to just when Biden first took office, including food, gas, rent/mortgage. Mortgage rates are at 8%, which means new home buyers are priced out of the market because they would be paying significantly more in interest than their current rent payments. Wall Street is only pumping and dumping because of false liquidity created by the Fed. There is no actual new money entering the markets from investors, in fact this year there has been net outflows from 401ks for the first time in decades. There will not be money flooding back into the consumer market when interest rates go down, people do not have savings accounts, over 50% of US citizens are living paycheck to paycheck right now and have drained their bank accounts over the past few years.
You forgot to mention that credit card debt is at all time highs.
This is why I don't understand why the stock market is viewed as the be all and end all of US financial Health. Its completely disconnected from Main St and economic reality, it just ignores fundamentals and huge macro events. That's because its run by the liquidity created out of thin air by the FED and Central banks. This explains everything and why markets aren't real...they are controlled and contrived...price discovery and free markets are a thing of the past. Sure you can say...well just make money money off them anyway but where does that leave you based on integrity and principles...its a sad state of affairs!
MSFT P/E 10 years ago was 27.97, now it is 360.53. Companies have not gained value, they have gain valuation. There is a stock market bubble and housing bubble concurrently. We have not seen these sorts of stock valuations and mortgage rates since the last major economic implosion.
Weird that an investing website has comments that primarily complain about the market going up.
Perma-bears & retrumplicans are rarely part of the silent majority.
Sad Republicans and America haters, mostly.
Now its absolutely super bubble without doubt
Perma-bears w/out doubts have been losing the past 2 weeks  ;-)
us are you push it threw for rhers too. only Hugh would be the one who could. Daniel Wolboldt.
Government shutdown next up...prepare for another 500 point rally!
yep, because the “shutdown” will be skipped..
The market will be much more bullish when gov't-shutting anarchist retrumplicans are voted outta office.
Inflation is much higher. They exclude so called volatile items like food and housing. You know...the only things that really count for most people...
Core CPI excludes volatile things like food and energy (housing is not considered volatile) and went down from 0.3% to 0.2% (MOM). CPI includes them and it went down even more (0.4% to 0.1% MOM)).
Oops. CPI (MOM) went down even more from 0.4% to 0.0%
Looks like a drop in the price of gas will save the global economy, despite the fact that the price of everything else is off the charts.  It could only be interpreted this way by savvy "investors" participating in the BIGGEST INVESTMENT JOKE IN THE WORLD.
How small is your charts?
* are
more bs from Mitch,everything is not of the charts Mitch, ,you apparently do not have the ability to read a price chart..most commodities from their highs beginning lib 2022, have dropped 20 to 60%. that includes energy.. the joke is on you Mitch....
at Costco store, glut of stuff, but only a few customers with eye shopping seem around. restaurants seem to have not many customers these days.
Of course your personal experience at the time you shop is more indicative than nationwide statistics. I personally see restaurants packed every time I go. Maybe I go to more popular restaurants.
When has Costco not have "glut of stuff"?
Yes and they are charging up their credit cards because they don't have the money.
slight recessionary inflation dip is more worrisome than euphoric. mkt bubble probably will collapse.
there were a lot of major strikes the last several months that have recently resolved - people on strike or who may go on strike watch their money, we're about to see a up spike but the impact of the high interest rates still has about 6 months before its done its run. Goolsi and all the other bank heads should talk a little less.
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