Dampened CPI pushes Dow Jones up 217 points, U.S. dollar dives

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NEW YORK, New York – A fractional decline in last month’s CPI triggered another sharp rally on Wall Street on Thursday. The U.S. dollar conversely dived on expectations the lower CPI signals a cooling of inflation and, thus, growing prospects for slower interest rate hikes ahead.

“The Consumer Price Index for All Urban Consumers declined 0.1 percent in December on a seasonally adjusted basis, after increasing 0.1 percent in November,” the U.S. Bureau of Labor Statistics reported Thursday.

“Over the last 12 months, the all-items index increased 6.5 percent before seasonal adjustment. The index for gasoline was by far the largest contributor to the monthly all-items decrease, more than offsetting increases in shelter indexes. The food index increased 0.3 percent over the month, with the food at home index rising 0.2 percent. The energy index decreased 4.5 percent over the month as the gasoline index declined; other major energy component indexes increased over the month.”

“The index for all items less food and energy rose 0.3 percent in December, after rising 0.2 percent in November. Indexes that increased in December include the shelter, household furnishings and operations, motor vehicle insurance, recreation, and apparel indexes. The indexes for used cars and trucks and airline fares were among those that decreased over the month. The all-items index increased 6.5 percent for the 12 months ending December; this was the smallest 12-month increase since the period ending October 2021. The all-items less food and energy index rose 5.7 percent over the last 12 months. The energy index increased 7.3 percent for the 12 months ending December, and the food index increased 10.4 percent over the last year; all of these increases were smaller than for the 12-month period ending November,” the Labor Department report said.

The Dow Jones industrials jumped 216.96 points or 0.64 percent to close Thursday at 34,189.97.

The tech-laden Nasdaq Composite gained 69.43 points or 0.64 percent to 11,001.10.

The Standard and Poor’s 500 rose 13.56 points or 0.35 percent to 3,983.17.

The biggest moves on Thursday were on the foreign exchange markets.

The U.S. dollar crumbled as holders of the greenback rushed for the exits. The euro surged to 1.0851 by the U.S. close Thursday.

The Japanese yen accelerated to 129.21. The Canadian dollar climbed to 1.3358. The British pound rose robustly to 1.3358.

The Swiss franc increased to 0.9282. The Australian dollar rallied hard to 0.6967. The New Zealand dollar reached 0.6395.

On overseas equity markets, the CAC 40 in Paris, France, advanced 0.74 percent. The German Dax increased 0.74 percent also. In London, the FTSE 100 was up 0.89 percent.

In Japan, the Nikkei 225 inched up 0.01 percent. The Hang Seng in Hong Kong rose 0.36 percent Thursday. China’s Shanghai Composite surged 1.61 percent.

The Singapore Straits Times Index dipped 0.11 percent. The Australian All Ordinaries jumped 1.13 percent. Indonesia’s Jakarta Composite added 0.69 percent.

In New Zealand, the S&P/NZX 50 climbed 0.24 percent. South Korea’s Kospi Composite in creased 0.24 percent.