Stocks resumed their inflation-driven rally on Tuesday after another report signaled that price hikes could be slowing.
The Dow Jones Industrial Average clocked 56.22 points, or 0.17%, at 33,592.92. The S&P 500 added 0.87% to 3,991.73, and the tech-heavy Nasdaq Composite surged 1.45% to close at 11,358.41.
The major averages rallied after the producer price index — a key measure of wholesale inflation — showed a 0.2% increase for the month of October, versus the consensus estimate for a 0.4% increase from Dow Jones. The report comes after last week’s consumer price index data showed signs of inflationary pressure declining last month, sparking a sharp rally.
“The PPI read certainly adds more fuel to the fire for those who feel we may finally be on a downward inflation trend,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley’s Global Investment Office. “The market embraced last week’s consumer downtick and today’s initial reaction seems to be more of the same.”
