Stock Market Live Updates: Asian stocks surge following US inflation data, Fed rate hike speculation eases

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U.S. stock indexes rallied on Tuesday as cooler-than-expected inflation data boosted expectations that the Federal Reserve was done raising interest rates and could start cutting them next year.

The benchmark S&P 500 briefly crossed the 4,500 mark for the first time in two months and the tech-heavy Nasdaq was trading at a fresh two-month high after data showed that growth in U.S. consumer prices eased in October, in part due to lower gasoline prices.

The S&P 500 index leapt 1.9%, the Dow Jones Industrial Average jumped 1.4%, and the Nasdaq Composite Index advanced 2.4%, its best day since April 27.

In the 12 months through October, the CPI climbed 3.2% after rising 3.7% in September, while economists polled by Reuters had forecast a 3.3% gain on a year-on-year basis.

Following the data, traders erased bets the Fed will raise borrowing costs any further and piled into bets on rate cuts starting by May. They are currently pricing in a 100% chance the Fed will hold rates next month, as per CME Group’s Fedwatch tool.

U.S. Treasury yields dropped, with the two-year yield , which best reflects short-term interest rate expectations, sliding to two-week lows. – Reuters