Dow Jones Soars 1,200 Points On Inflation Report: Why The Market

Dow Jones futures edged higher overnight, along with S&P 500 futures and Nasdaq futures.

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The stock market rally surged Thursday following a cooler-than-expected CPI inflation report, with the Dow Jones running up 1,198 points. Headline and core price gains were lower than expected, bolstering the case for slower Fed rate hikes. Treasury yields and the dollar plunged.

If inflation continues to ease, the Fed could choose to end rate hikes sooner than Fed chief Jerome Powell suggested last week.

A lot of the big moves were in beaten-down stocks. Apple (AAPL), Microsoft (MSFT), Google parent Alphabet (GOOGL), Facebook-parent Meta Platforms (META), Amazon.com (AMZN) and Tesla (TSLA) were all big winners Thursday, but MSFT stock was the only one to move above the 50-day line. Nvidia (NVDA), which has a higher market cap than META stock now, spiked after already reclaiming the 50-day line, but still needs a lot of work.

Many crashing cloud software stocks boasted double-digit gains Thursday. Digital Turbine (APPS) erupted for a 61% gain following earnings, but that’s not even a two-month high.

Still, investors should definitely consider adding more exposure and be looking for stocks setting up.

There weren’t many actionable stocks Thursday, however. But GlobalFoundries (GFS), Enphase Energy (ENPH), Griffon (GFF), Builders FirstSource (BLDR) and General Motors (GM) all flashed various buy signals.

GM stock was added to SwingTrader and was Thursday’s IBD Stock Of The Day. ENPH stock is on the IBD Leaderboard watchlist and is on the IBD 50 list.

Dow Jones Futures Today

Dow Jones futures climbed 0.1% vs. fair value. S&P 500 futures tilted higher and Nasdaq 100 futures rose 0.15%.

The bond market will be closed Friday for Veterans Day. U.S. stock markets will open as usual.

Bitcoin, which got above $18,000 at one point Thursday after crashing to a two-year low below $16,000 on Wednesday afternoon. But the cryptocurrency faded to about $17,000 Thursday night. Crypto lender BlockFi said that it was pausing withdrawals in the wake of FTX nearing collapse. Earlier this year, FTX reached a deal to acquire BlockFi.

Beijing reported the most Covid cases in over a year as rising infections nationwide spur fresh lockdowns. China’s new leaders urged more-targeted, “decisive” restrictions to control the spread.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live

Stock Market Rally

The stock market rally started strong and remained so throughout Thursday, closing at session highs.

Dow futures spiked before the open on the surprisingly tame CPI inflation report. October consumer prices rose 0.4%, or 0.3% excluding food and energy. The CPI inflation rate fell to 7.7%, the lowest since January. Core inflation pulled back to 6.3% vs. views to stay at a 40-year-high…