The S&P 500 lost some of its big initial gains on Tuesday as volatility is still high after new inflation data. It stayed green till the end as investors were happy to see that inflation pressures had gone down for the second month in a row. The Federal Reserve started its two-day meeting.
The S&P 500 went up 0.7%, the Dow Jones Industrial Average went up 0.1%, or 44 points, and the Nasdaq Composite went up 0.84 %. On Tuesday, the Labor Department said that its index of consumer prices (CPI) went up 0.1% in November after going up 0.3% in October. The CPI went up by 7.1% over 12 months (YoY). This was the smallest increase since December 2021.
Read more here: EUR/GBP trades steady ahead of central banks combo
The lower inflation number probably won’t change the Fed’s decision on monetary policy, which is expected to be announced on Wednesday. However, it will probably cause members to argue about how much more they should raise rates until they reach a peak.
Looking at some of the biggest companies, Meta Platforms Inc. went up more than 4%, Alphabet Inc. went up 2%, and both Apple Inc. and Microsoft Corporation went up more than 1%.
The dollar does not like good data
After the US Consumer Price Index came out, the value of the US dollar slumped. The Greenback stayed in a bad position through the session and was close to its lows from last few months.
After reaching a high of 1.0672, the EUR/USD pair stays around 1.0620 with the closing bell. In the meantime, GBP/USD trades at 1.2350 ahead of the UK Consumer Price Index for November. The Australian dollar keeps making big gains against the US dollar. Right now, the pair is worth about 0.6850. The USD/CAD has dropped to 1.3540.
Oil and gold to the moon?
The closing of the pipeline from Canada to the US was already helping oil recover from its worst drop in nine months last week. This was before Tuesday’s relatively tame inflation data, which pointed to possible smaller US rate hikes in the future.
Because of this, UK Brent oil and US West Texas Intermediate, or WTI, rose by at least 3% for the second day in a row. That gave the two benchmarks a weekly gain of about 6% so far, which made up about half of last week’s almost 12% drop.
Brent crude closed at $80.68 per barrel, up $2.69, or 3.5%. It went up 2.4% on Monday. Last week, the price of the global crude benchmark fell $9.47, or 11%, to $75.14, which is the lowest it has been since December 23rd, 2021. WTI for delivery in January went up $2.22, or 3%, to $75.39. WTI went up by 3% on Monday. Last week, the price of U.S. crude fell by $9.28, or 11%.
You may also like: US bond yields remain pressured
The most important gold futures contract for February on New York’s Comex closed at $1,825.50 an ounce, an increase of $33.20, or almost 2%. Gold on the Comex hit a high of $1,836.80 during the session, which was the highest price since June 27th.
Some traders pay more attention to the spot price of gold than to the futures price. The spot price of gold was $1,812.42 an ounce, up $30.99, or about 2%, from the futures price. Silver also gained nicely to $23.942 by 0.539 or 2.30%.
Comments
Post has no comment yet.