Stocks rally as US inflation rate recedes

The US Consumer Prices Index (CPI) rose by 3.2% in October, below the expected 3.3% and down from September's 3.7%. Core inflation, excluding food and energy, fell to 4.0%, the lowest since September 2021. Monthly CPI was unchanged in October compared to September, signalling a slowdown. This data may ease concerns about inflation, potentially bringing forward future rate cuts. The Federal Reserve, which recently held its benchmark interest rate steady, remains cautious, with Fed Chair Jay Powell emphasising a data-driven approach and the possibility of tightening monetary policy further if needed. Despite the slowdown in inflation, the Fed is expected to delay rate cuts into 2024 if consumer prices persistently stay high. This market responded with a rally in the S&P 500 and tech-heavy Nasdaq 100. The dollar also fell against major currencies.