Wall Street Surges on Cooler Inflation Data

Wall Street experienced a significant rally on Friday as cooler-than-expected inflation data from the Personal Consumption Expenditure (PCE) index, which rose 2.4% annually in November, eased market concerns regarding the Federal Reserve's forecast of only two rate cuts for 2025. Following a volatile trading environment, major indices like the S&P 500 and Dow Jones Industrial Average experienced notable increases, with stocks like Nvidia and Eli Lilly contributing to the upward momentum. The retreat of Treasury yields from over six-and-a-half-year highs also aided the market's recovery. Despite the positive market reaction, uncertainties remain, particularly concerning a potential U.S. government shutdown and the Fed's hawkish stance on interest rates. Traders have adjusted their expectations for rate cuts in 2025, now anticipating the first cut in March, reflecting a shift in sentiment after earlier fears of prolonged high rates. Overall, the recent inflation data provided a much-needed boost to investor confidence amid ongoing economic challenges.