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The
benchmark S&P 500 and the tech-heavy Nasdaq closed 5.5% and 7.4%
higher on Thursday, racking up their biggest daily percentage
gains in over 2-1/2 years after data showed annual inflation
below 8% for the first time in eight months.
"If ever we needed proof that the market is absolutely desperate
for some good news on inflation, yesterday proved it in spades,"
Deutsche Bank strategist Jim Reid said.
Futures contracts tied to the Fed's benchmark rate show traders
now expect the blistering pace of policy tightening to slow next
month, and for the U.S. central bank to stop its rate hikes
sooner than expected.
Investors are now betting on a 50-basis point rate hike in
December, while the top policy rate is seen in the 4.75%-5%
range next March, lower than the 5% plus range seen before the
inflation data.
The S&P 500 has now rallied over 10% from its mid-October
closing lows, while the Nasdaq has climbed nearly 8%, aided by
better-than-expected earnings reports and hopes of a Fed
slowdown.
However, both the indexes are down sharply on a year-to-date
basis, on course for their worst annual performance since 2008,
on fears that surging inflation and rising interest rates will
dent corporate profits.
At 05:48 a.m. ET, Dow e-minis were up 130 points, or 0.39%, S&P
500 e-minis were up 16.25 points, or 0.41%, and Nasdaq 100
e-minis were up 66 points, or 0.57%.
Shares of megacap companies extended gains in premarket trading,
with Apple Inc up 0.5% after a near 9% surge in the previous
session.
U.S.-listed shares of Chinese companies rose, with Alibaba Group
Holding Ltd up 3.9% as China eased some of its strict COVID-19
rules.
A survey from the University of Michigan due later in the day is
expected to show consumer sentiment eased slightly in November,
with the index seen slipping to 59.5 points this month from 59.9
in October.
(Reporting by Shubham Batra and Sruthi Shankar in Bengaluru;
Editing by Shounak Dasgupta)
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