The Dow Jones Industrial Average edged up on Wednesday as investors aimed to extend a post-election rally following an inflation report that met expectations.
The blue-chip index rose by 258 points, or 0.3%. Meanwhile, the S&P 500 also advanced 0.3%, and the tech-heavy Nasdaq Composite increased by 0.2%.
Rivian, Cava, and Rocket Lab were some of the leading stocks.
“It’s time to stop worrying about the Fed and inflation,” David Russell, global head of market strategy at TradeStation told CNBC.
The major equity averages took a breather on Tuesday after a post-election rally.
After Donald Trump was elected president once again in the 2024 US elections, stocks and the dollar surged. Major equity benchmarks notched up record highs post the election outcome.
The dollar index has reached its peak since April
The dollar index rose 0.4% on Wednesday to 106.50.
This was the highest point since April 16, when the index had touched 106.517.
Expectations of tariffs on imported goods and tax cuts under the Trump regime are fuelling the rise in the dollar.
These measures are likely to keep inflation elevated in the US, which could force the Federal Reserve to keep interest rates higher.
Meanwhile, Bitcoin extended its rally, with the cryptocurrency rising nearly 4% on Wednesday.
Bitcoin breached $92,000 for the first time on Wednesday.
US CPI rises in October
The US consumer price index rose 2.6% in October from the year-ago period. On a month-on-month basis, the index rose 0.2%.
The rise was in line with expectations of the market.
Excluding food and energy, CPI rose 0.3% month over month, also matching Dow Jones estimates.
As the inflation figure was in line with market expectations, bets on another interest rate cut by the Fed in December remained intact.
According to the CME FedWatch tool, traders have priced in an 82.3% probability of the US central bank cutting rates by 25 basis points in December.
Spotify Technologies jump
Shares of Spotify Technologies jumped about 8% on Wednesday.
Total monthly active users for the third quarter came in at 640 million. This was an 11% increase from a year ago, beating FactSet consensus.
However, the company still fell short of analysts’ expectations for its bottom line and topline for the third quarter.
Small caps resume postelection rally
Small-cap benchmark Russel 2000 jumped 1% on Wednesday, after a pause in the previous session on Tuesday.
Small companies, which are more domestic-oriented and cyclical, are expected to perform well under a Trump presidency.
Trump has proposed tax cuts and is also expected to impose tariffs on all goods imported into the US, especially from China.
The index rallied 8.6% last week and it fell 1.8% Tuesday.
Skyworks Solutions dip, Cava surges
The semiconductor company, Skyworks Solutions dipped nearly 4% on Wednesday.
The company’s stock fell despite posting strong earnings as the target price was lowered by JPMorgan Chase & Co. from $120 to $100 in a report released on Wednesday.
Skyworks reported adjusted earnings of $1.55 per share, while analysts polled by LSEG had forecast $1.52 per share.
Meanwhile, Cava, the fast-casual chain, jumped 14% after reporting robust earnings.
Cava announced earnings of 15 cents per share on revenues of $2.44 million. Meanwhile, analysts had expected earnings of 11 cents per share and $2.34 million in revenues, per LSEG.
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