WASHINGTON: Wall Street stocks surged Wednesday as traders digested US inflation data and strong earnings reports by major banks.
The Dow Jones Industrial Average jumped 1.5 percent to 43,144.47 while the broad-based S&P 500 Index added 1.4 percent to 5,921.89.
The tech-focused Nasdaq Composite Index advanced 1.6 percent to 19,348.94.
This came as US consumer inflation accelerated to 2.9 percent in December from a year ago, according to government data released Wednesday.
But annual inflation excluding the volatile food and energy components came in lower than expected.
US stocks rise after benign inflation report
“We’re certainly in line with or slightly better than expectations” when it comes to underlying inflation, said Art Hogan, of B. Riley Wealth Management, referring to the consumer price index figures.
“That’s driving optimism in the markets,” he added.
Early Wednesday, JPMorgan Chase also reported a big jump in fourth-quarter profits, led by solid revenue growth in investment banking and trading.
And Goldman Sachs reported a more than doubling of fourth-quarter profits, behind broad strength across its financial businesses.
Hogan added that there had been great expectations for the banks to do well, and they “have not disappointed” so far.
He noted that a lot of positive news has been priced into the sector in recent months.
“Part of that comes from the consideration that the new administration might have a lighter regulatory touch,” he said, referring to President-elect Donald Trump’s incoming government.
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