Stocks saw a massive comeback Thursday, with the Dow Jones Industrial Average climbing 1,500 points from peak to trough, as traders shrugged off another inflation report.
The Dow Jones Industrial Average rose 827.87 points, or 2.83%, to close at 30,038.72, after falling more than 500 points earlier in the day. The S&P 500 rose 2.60% to 3669.91, breaking a six-day losing streak. The Nasdaq Composite Index rose 2.23% to end the day at 10,649.15.
The volatile session saw stocks drop to their lowest levels since 2020 after higher-than-expected inflation data and then posted a stunning recovery. The Dow Jones regained more than 1,400 points as traders digested the September CPI report. The S&P 500 recorded its widest trading range since March 2020.
Thursday saw the fifth-largest intraday reversal from the all-time low of the S&P 500, and the fourth-largest reversal for the Nasdaq, according to SentimenTrader.
Gains in energy and banking stocks led the recovery. Chevron shares are up 4.85% with higher oil prices, and Goldman Sachs and JPMorgan are up 3.98% and 5.56%, respectively. reflection in Big tech names Such as Apple, Microsoft and a boom in semiconductors Nvidia and Qualcomm also contributed to the rise.
Investors may bet that a stronger-than-expected inflation report means that price increases will soon peak.
“Maybe we’re raising these recent inflation rates, and from there we’re starting to slow,” said Liz Ann Saunders, chief investment analyst at Charles Schwab. She added, however, that volatility in stocks is likely to continue as investors digest more inflation data and earnings season begins.
“I think there are still a lot of things that can lead to volatility and intraday volatility is just the nature of the beast at the moment,” she said.
Stocks fell to session lows when the September consumer inflation report showed a larger-than-expected increase. The CPI rose 0.4% during the month, more than the 0.3% estimate by Dow Jones. On an annual basis, inflation rose 8.2%.
Continued high inflation could mean that the Fed is more aggressive with future interest rate hikes and keeping rates higher until rate increases subside.
