Slow Dec. inflation boosts stocks

 Slow Dec. inflation boosts stocks

The stock market has been on a rollercoaster ride in recent months, with investors nervously watching as inflation rates continue to rise. However, the latest data from the US Bureau of Labor Statistics shows that inflation has slowed down in December, which has given a boost to stocks.

The Consumer Price Index (CPI) rose by just 0.3% in December, which is lower than the 0.5% increase that was expected by economists. This is good news for investors, as it means that the Federal Reserve is less likely to raise interest rates in the near future. Higher interest rates can be bad for stocks, as they make borrowing more expensive and can slow down economic growth.

The news of slower inflation has been particularly welcomed by tech stocks, which have been hit hard by rising interest rates in recent months. The tech-heavy Nasdaq index rose by 1.5% on the back of the news, while the S&P 500 and Dow Jones Industrial Average also saw gains.

However, it’s worth noting that inflation is still higher than it was a year ago, and there are concerns that it could continue to rise in the coming months. The Omicron variant of Covid-19 has caused disruption to global supply chains, which could push up prices for goods and services.

Despite these concerns, the latest data is a positive sign for investors, who have been grappling with a volatile stock market in recent months. It’s also good news for consumers, who have been hit hard by rising prices for everyday goods and services.

Overall, the slower inflation rate in December is a welcome relief for investors, and could help to stabilize the stock market in the coming weeks and months. However, it’s important to keep an eye on inflation rates in the future, as they could still have an impact on the economy and the stock market.