November’s softer-than-expected inflation report lifted investors’ sentiment, and they grew more optimistic about a year-end rally. The moderating inflation elicited the Fed to stick to the word of a slower pace of rate hike, as it announced a 50-basis-point rate increase this week.
Fundstrat’s Tom Lee had earlier reiterated that softening inflation could bring “fireworks” in the stock market through the last five weeks of the year. He also predicts the S&P 500 to reach as high as 4,500 by year-end.
