U.S. stocks rallied after Wall Street and global financial markets received a boost from an encouraging update on U.S. inflation.

The Nasdaq composite climbed 1.7%. I Photo: Nasdaq Facebook
Strong profit reports from major U.S. banks also helped propel indices toward their best performance in two months, as reported by Stan Choe for the Associated Press (AP). The S&P 500 rose 1.5% in early trading.
The Dow Jones Industrial Average increased by 652 points, or 1.5%, as of 9:35 a.m. Eastern Time, while the Nasdaq composite climbed 1.7%.
Treasury yields also fell sharply in the bond market following the report on household expenses in December, including the costs of eggs, gasoline, housing, and other necessities.
The report indicated that overall inflation rose to 2.9% from 2.7% in November, according to Zimo Zhong of AP.
However, the underlying numbers were more optimistic. Core inflation, which excludes food and energy prices due to their volatility, slowed to 3.2% in December. Economists had expected it to remain at 3.3% for a fourth consecutive month, according to FactSet.
The Federal Reserve prioritizes this core inflation figure over the overall rate, making the decline particularly significant amid concerns that inflation improvements had stalled, complicating efforts to reach the Fed’s 2% target.
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