Stock Market Today: Stocks Brush Off Hot CPI Update in Major Reversal
The major indexes were staring at steep losses to start the day, but finished the session with notable gains.
Stocks initially sold off Thursday after the latest consumer price index (CPI) showed inflation remained stubbornly high in September, before embarking on a massive rebound to end the day with impressive gains.
The Labor Department this morning said consumer prices ran hotter-than-expected last month – with many experts saying this all but guarantees the Federal Reserve issues another substantial rate hike at its November meeting. The Dow and S&P 500 were off roughly 2% at their session lows, while the Nasdaq was down 3%.
But by lunchtime, all three indexes were in positive territory – and they continued climbing from there. "Today's market reversal was a head-scratcher," says Edward Moya, senior market strategist at currency data provider OANDA. "Despite a hot inflation report, U.S. equities turned positive, as some investors are convinced core inflation will soon start trending lower." Moya adds that the rally "probably got a boost from short covering as well, but given the path for rates is higher, this market reversal won't last long."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Today, though, the buying lasted into the close. The Dow Jones Industrial Average surged 2.8% to 30,038, while the S&P 500 Index (+2.6% at 3,669) and the Nasdaq Composite (+2.2% at 10,649) easily snapped their lengthy losing streaks.
The Best Energy ETFs to Buy
Investors should continue to expect high levels of inflation, at least in the near term. According to Kiplinger staff economist David Payne, inflation will likely end 2022 around 8% before easing back in 2023.
José Torres, senior economist at Interactive Brokers, says that one contributing factor to higher inflation will be rising energy prices, which jumped recently following a decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to cut oil output by 2 million barrels per day. "If lower gasoline prices haven't produced satisfying inflation readings in August and September, how damaging might they be in October?" Torres asks. "A challenging winter ahead for Europe and the possibility of the relaxation of Chinese lockdowns may drive additional energy demands and propel prices further."
If that's the case, oil stocks and energy exchange-traded funds (ETFs) might get a lift as well. Here, we explore nine energy ETFs that could help investors leverage gains in oil and gas prices.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
A Modern Guide to Money Etiquette: Gifts, Tips, Splitting Bills and More
What is modern money etiquette? The customs for splitting a restaurant check, purchasing a wedding gift, tipping and more have evolved. These guidelines can help.
By Emma Patch Published
-
Want to Give Money to Your Adult Children? 10 Things You Should Know
It’s less taxing to give money to your adult children than you might think. A good plan can help you avoid certain pitfalls — and drama.
By Jeremy Greenfield Published
-
Stock Market Today: Stocks Rally on Strong Netflix Earnings
Mega-cap tech leads the charge as markets rise for a sixth straight week.
By Dan Burrows Published
-
Stock Market Today: Dow Gains on Strong September Retail Sales
Taiwan Semiconductor Manufacturing's earnings beat and solid outlook created tailwinds for several chip stocks.
By Karee Venema Published
-
Stock Market Today: Markets March Higher as Strong Earnings Offset Weakness in Chips
Upbeat quarterly results helped stocks bounce back with broad-based gains.
By Dan Burrows Published
-
Stock Market Today: UnitedHealth Selloff Drags on Dow
While the main indexes ended in the red, Walgreens Boots Alliance had its best day since 2008.
By Karee Venema Published
-
Stock Market Today: Stocks at Record Highs as Earnings Season Ramps Up
Markets continued where they left off last week amid rising optimism over corporate profits.
By Dan Burrows Published
-
Stock Market Today: Stocks Hit Fresh Highs on Bank Earnings, Econ News
Strong corporate profits and benign economic data once again sent equities to record levels.
By Dan Burrows Published
-
Stock Market Today: Markets Slip on Hot Inflation Print, Layoff News
Economic data continues to complicate expectations for Federal Reserve rate cuts.
By Dan Burrows Published
-
CPI Report Points to Gradual Pace for Rate Cuts: What the Experts Are Saying
CPI Inflation surprised to the upside last month but the disinflation trend remains on track.
By Dan Burrows Published