With the recent US inflation reading coming out, both the forex market and the stock market have seen record highs. The stock market has been seeing an especially dramatic recovery on various commodities, as investors were more willing to make much riskier plays.
The dollar also managed to give up plenty of its earlier gains in the forex market, as the stock market makes its well-deserved recovery. The recovery was also fueled by bets that there is going to be a major Federal Reserve rate hike.
Traders were initially looking to trade in a much safer environment given the Consumer Price Index report. However, after carefully inspecting its findings, they decided that playing it safe weas just not worth it.
The report highlighted that the CPI managed to increase by at least 8.2% every year thanks to rises in food prices and rents. Both of these factors have especially favored this slightly bullish run. But even though the CPI saw a massive boost, the core CPI is what really motivated investors to take that leap.
The Dollar Falls Against Most Other Currencies
The first major change that kicked off this drastic recovery was the dollar falling from its dominant high. Investors ended up taking the opposite response to the data that they saw, leading to a 32-year peak.
But back on wall street, various stock options like the S&P 500 managed to close its current session with a major upset, growing by 2.6%. This rise was very much a sight for sore eyes, as investors had seen the price of this asset fall by nearly the 6% over the past six sessions.
The S&P 500 also managed to fall to one of its lowest values of all time, dipping to 2.3% by Thursday. This value happened to be the lowest value for the stock option since November 2020.
S&P Rise was a Very Good Sign
While it did come as a shock to plenty of investors to see the S&P 500 rise by such an extreme, it was also a very good sign. It showed that there were enough investors in the market right now who were not taken off guard by something like this.
Of course, the S&P 500 wasn’t the only major stock option to its prices rise significantly, since the Dow Jones was the biggest surprise.
Dow Jones Managed to Rise by 900 Points
What was easily one of the biggest surprises after over a week of nothing but downturns, the Dow Jones managed to see a major increase of almost 900 points. More specifically, it managed to increase by 2.83%, with the NASDAQ coming in close with a rise of 2.23%. All in all, this is one of the biggest recent rallies to happen in the market in a long time.