U.S. stocks traded sharply higher in Wednesday’s final hour of trading, with the Dow Jones Industrial Average and S&P 500 headed for a third consecutive session of gains after December’s CPI data sparked a relief rally.
The Dow Jones Industrial Average was up 776 points, or 1.8%, at 43,294.
The S&P 500 was up roughly 111 points, or 1.9%, at 5,954.
The Nasdaq Composite was up about 469 points, or 2.5%, near 19,514. It is headed for its first day of gains in the past six sessions.
“The CPI data shows that inflation is not out of control, and that’s a relief, but it is not likely to get to target anytime soon,” said Arnim Holzer, the New York-based global macro strategist for investment advisor Easterly EAB Risk Solutions.
Via phone, he said: “The market has the opportunity to grow into equilibrium with interest rates, and can take solace in the fact that growth for the economy is still good. That is a more optimistic view than the market previously had. We do think rates are likely to remain higher for longer than investors expected and, if growth and productivity come through, companies and investors will be able to adjust to that equilibrium in interest rates. What you are seeing today is some reflection of that view.”