US stocks surge on easing fears of rising inflation
Major US equity indices opened with strong gains on Tuesday and were being supported by fading expectations about a steep Fed monetary policy tightening cycle.
Following a 0.5% increase in January, the US consumer prices slowed and rose a mild 0.2% in February. The mostly in-line inflation figures outweighed news of Rex Tillerson's ouster as the US Secretary of State and remained supportive of the early bullish move.
Against the backdrop of last week's sluggish wage growth data, the headline CPI print reaffirmed that the Fed would stick to its plan to raise interest rates gradually and increased appetite for equities as an alternative investment.
It, however, remains to be seen if the recent bullish trend is sustainable at the time when the US President at a Donald Trump is threatening a trade war with countries that don’t improve the terms of trade for the US.
At the time of writing this report, the Dow Jones Industrial Average surged around 150-points to 25,330 and the broader S&P 500 Index added nearly 13-points to 2,795. Meanwhile, tech-heavy Nasdaq Composite climbed over 30-points and touched a fresh intraday record high.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
