Dow futures surge more than 800 points after October inflation report

Stock futures surged Thursday after October’s reading of consumer prices raised hopes that inflation has peaked.

Futures connected to the Dow Jones Industrial Average jumped 844 points, or 2.6%. S&P 500 futures jumped 3%, while Nasdaq 100 futures surged more than 3.7%.

The consumer price index, a broad-based measure of goods and services costs, rose just 0.4% for the month and 7.7% from a year ago. That was its lowest annual increase since January. Economists were expecting increases of 0.6% and 7.9%, according to Dow Jones. Excluding volatile food and energy costs, so-called core CPI increased 0.3% for the month and 6.3% on an annual basis, also less than expected.

“It certainly shows how much the markets been keyed about, worried about and wants to run on CPI if you get any sort of help here,” said John Briggs of NatWest. “It just brings up the idea of peak inflation, peak Fed…The Fed will slow and peak rather than continue to aggressively hike at 75 basis point as at a time.”

Treasury yields plunged after the CPI report, with the 10-year Treasury yield falling more than 18 basis points to 3.946%, falling below the key 4% level. The yield on the 2-year Treasury dropped more than 23 basis points to 4.395%.

Tech shares that have been the hardest hit this year as inflation and rates surged led the gains in premarket trading. Nvidia and Tesla soared more than 5%. Salesforce jumped 4%. Apple gained 3%.

Semiconductor stocks got a boost, with shares of Lam Research, KLA and Applied Materials each up more than 5%.

It follows a day of losses with the Dow dropping 646.89 points, or 1.95%. The Nasdaq Composite and S&P 500 shed nearly 2.5% and about 2.1%, respectively.

The declines came amid uncertainty stemming from U.S. midterm elections. The market had hoped Republicans would take sweeping control of the House of Representatives and the Senate on Tuesday – a situation that would create gridlock in Washington, D.C. Instead, key Senate races in Arizona, Georgia and Nevada remain tightly contested. Indeed, the Senate race between Raphael Warnock, the Democratic incumbent, and Herschel Walker will head to a December runoff.

Stocks’ suffering worsened late Wednesday after crypto exchange Binance said it’s backing out of plans to acquire its rival FTX. This dragged down the tech sector and pulled bitcoin‘s price to lows last seen in 2020.