Stocks rose sharply in the last trading session, with the S&P 500 adding 2.1% to hit its highest level since early May, the Dow Jones jumping 535.10 points, and the Nasdaq Composite gaining 2.9% to 12,854.80, its highest close since late April. This was driven by the latest inflation report that indicated a slowing pace of the price increases. Inflation rose 8.5% in July, slightly cooler than the analysts’ expectation of 8.7%.
However, Fed officials expect to continue to tighten monetary policy until price pressures are fully broken. The Fed is “far, far away from declaring victory” on inflation, Minneapolis Federal Reserve Bank President Neel Kashkari said. Moreover, strength in job growth and wages is prompting the Fed to hold on to its aggressive stance.
