Wall Street Gains On Encouraging Inflation Data

Major US stock indexes closed more than 1% higher on Tuesday (Wednesday, Feb. 1, 2023, in Manila) as labor cost data encouraged investors about the Federal Reserve's aggressive approach to taming inflation a day ahead of the central bank's critical policy decision, Lewis Krauskopf, Yohann M. Cherian and Shreyashi Sanyal reported for Reuters.

Photo Insert: The S&P 500 tallied its first January increase since 2019, gaining 6.2%, while the tech-heavy Nasdaq jumped 10.7% for the month - its biggest January percentage rise since 2001.

Investors also digested a full plate of earnings reports. Shares of Exxon Mobil Corp. and United Parcel Service Inc. rose following their respective results, while Caterpillar Inc. and McDonald's Corp. ended weaker after their results.

The S&P 500 tallied its first January increase since 2019, gaining 6.2%, while the tech-heavy Nasdaq jumped 10.7% for the month - its biggest January percentage rise since 2001.

The Dow Jones Industrial Average (.DJI) rose 368.95 points, or 1.09%, to 34,086.04, the S&P 500 (.SPX) gained 58.83 points, or 1.46%, to 4,076.6 and the Nasdaq Composite (.IXIC) added 190.74 points, or 1.67%, to 11,584.55.

US labor costs increased at their slowest pace in a year in the fourth quarter as wage growth slowed, Labor Department data showed. The U.S. central bank on Wednesday is expected to hike the Fed funds rate by 25 basis points, following a 2022 in which the Fed aggressively boosted rates to control soaring inflation.

The labor cost data is "indicating that maybe what the Fed has done is working and ... we’re rounding the corner on interest rate hikes," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

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