U.S. core inflation hits a 40-year high, paving the way for Federal Reserve to continue aggressive hike rate . US stocks opened low and closed high on Thursday. The major stock indexes counterattacked strongly after falling to a two-year low. The Dow Jones Industrial Average fluctuated 1,500 points in the day, and the S&P 500 index hit the largest single-day amplitude since March 2020. The three major stock indexes all have a full-day amplitude of more than 5%.
As of the close, the Dow Jones Industrial Average rose 827.87 points, and rose 2.83% to 30038.72 points; the S&P 500 index closed higher by 92.88 points, or 2.60%, or 3669.91 points; the Nasdaq fell more than 3% at the beginning of the session, and finally closed at 10649.15 points, or 232.05 points, or 2.23%.
US stocks rebounded sharply
US stock market reversal may be due to investors interpreting the overwhelming inflation report as prices are about to reach their peak. The data of the U.S. consumer price index (CPI) in September was released before the market. In September, the core CPI rose 6.6% year-on-year, the largest year-on-year increase since August 1982.
Liz Ann Sonders, chief investment strategist at Charles Schwab, commented: "Inflation begins to slow down from now on, but as investors digest more inflation data and corporate financial reports, stock market turmoil is expected to continue. There are still many factors that may intensify volatility, and it is natural for intraday fluctuations at this stage."
Technical rebound may also be one of the factors causing stock market volatility. The S&P 500 fell to 50% of the gains after the pandemic was brought back, triggering procedural buying. Investors bought put options to prevent stock market plunges. As profits were recorded, they bought stocks to keep the market neutral. Michael Contopoulos, head of fixed income department of investment institution Richard Bernstein Advisors, explained that short cover for may cause a rebound, and there may be a considerable number of defensive positions in the US stock market recently. Chris Zaccarelli, chief investment officer of Independent Advisor Alliance, financial institution, said: "Inflation is high and the Fed will be more hawkish than ever before. Under such expectations, it is difficult for the market to have a sustainable rebound." In terms of the
sector, energy and bank stocks led the market higher, Chevron closed 4.85%, while Goldman Sachs and JPMorgan rose 3.98% and 5.56% respectively. Among technology stocks , Apple rose 3.36%, Microsoft rose 3.76%, Nvidia and Qualcomm rose 4.00% and 3.88% respectively. Among the
stocks , the world's largest asset management company, , BlackRock, released its third-quarter financial report before the market was held. Due to market turmoil, the net profit in the quarter fell 16.1% year-on-year to US$1.41 billion, and its revenue was US$4.31 billion, a decrease of 15% from the same period last year. The scale of asset management has declined for three consecutive quarters, falling from US$8.5 trillion in the second quarter to US$8 trillion. The stock closed up 6.58%.
30-year mortgage interest rate hit a new high of more than 20 years
The market generally expects that the Federal Reserve will raise interest rates by at least 75 basis points at its November interest rate meeting, and mortgage interest rates soar. According to data from Freddie Mac, the average interest rate for US 30-year mortgage loans has climbed to 6.92% in the week ending on the 13th, a new high in more than 20 years. Since August, mortgage rates have risen nearly two percentage points, and many lending companies offer interest rates far higher than 7%, while the average 30-year mortgage loan interest rate was 3.05% throughout last year. Mace McCain, chief investment officer of Frost Investment Advisors, said the market wanted to see inflation cool down, but things went against its expectations, which allowed the Fed to go longer and further on the road to rate hikes. The agency predicts that the Fed will continue to advance the most radical tightening cycle since the 1980s, with interest rates reaching 4.25% to 4.5% by the end of the year.
International oil prices rose, with Brent oil rising 2.4% to $96.47 per barrel, while US oil rose 2.2% to $89.20 per barrel. Energy prices have always been an important driving force for US inflation. The peak time of inflation has been delayed repeatedly. As winter approaches, the inflation outlook adds uncertainty. The U.S. Energy Information Administration (EIA) said on Thursday that due to rising fuel costs and lower winter temperatures, heating costs for American households will rise compared with last year. It is expected that the price of natural gas will rise by 28% year-on-year and electricity prices will rise by 10%.
