US stock indexes rose on Wednesday after consumer prices data that largely met expectations eased some concerns about faster-than-expected interest rate hikes, with big technology stocks offering the biggest boost.
Data from the Labor Department showed its consumer price index increased 0.5% last month after rising 0.8% in November, while in the 12 months through December, the CPI surged 7.0% to its highest year-on-year rise in nearly four decades.
Economists polled by Reuters had forecast the CPI gaining 0.4% in December and shooting up 7.0% on a year-on-year basis.
“I don’t see this disturbing the markets because higher inflation was expected,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
“The fact that the core rate came in just about in line with expectations suggests that we’re beginning to see some sort of a decline going forward.”
Eight of the 11 major S&P 500 sector indexes were higher in early trading, with technology and consumer discretionary that house some of the biggest growth companies, boosting the benchmark index.
Mega-cap companies including Apple Inc, Amazon.com Inc, Microsoft Corp, Alphabet Inc and Tesla Inc extended gains and rose up to 1.7%.
Growth and technology stocks, hit by rising Treasury yields and hawkish commentary from the Federal Reserve, have staged a comeback this week, with investors watching a variety of metrics to decide whether to buy the rally or brace for more declines.
Big Tech was buoyed by comments from Fed Chair Jerome Powell on Tuesday which sounded less hawkish, easing concerns sparked by minutes from the central bank’s December meeting.
At 9:52 a.m. ET the Dow Jones Industrial Average was up 183.14 points, or 0.51%, at 36,435.16, the S&P 500 was up 26.46 points, or 0.56%, at 4,739.53 and the Nasdaq Composite was up 109.59 points, or 0.72%, at 15,263.04.
JPMorgan Chase & Co, Citigroup Inc and Morgan Stanley will be kicking off the fourth-quarter earning season on Friday, followed by results from Bank of America Corp on Jan. 19.
Shares of U.S.-listed Chinese companies extended gains from last week. Ride-hailing company Didi Global was leading the pack, up 3.5%, on a media report that its Hong Kong IPO, announced in December, could happen in the second quarter of this year along with its withdrawal from the NYSE.
Biogen dropped 9.4%, dragging down the S&P 500 healthcare index, which fell 0.4%.
The U.S. government Medicare program said on Tuesday it plans to cover Alzheimer’s treatments including Biogen’s Aduhelm but will require patients to be enrolled in a clinical trial, limiting access to more than many expected.
Jefferies Financial Group slipped 9.3% after missing estimates for fourth-quarter earnings and revenue.
Advancing issues outnumbered decliners by a 3.00-to-1 ratio on the NYSE and by a 1.79-to-1 ratio on the Nasdaq.
The S&P index recorded 34 new 52-week highs and one new low, while the Nasdaq recorded 35 new highs and 23 new lows.