US Stocks and Treasury Bonds Rally as Inflation Eases

On Wednesday, Wall Street stocks increased, and Treasury bonds rallied after the latest US consumer price index report from the Bureau of Labor Statistics.

The data showed headline annual inflation reduced from 6% in February to 5% in March, with economists predicting a reading of 5.1%.

Core inflation, which is preferred by the Fed because it removes volatile food and energy prices, increased from 5.5% in February to 5.6% in March, in line with economists’ expectations.

The moves in equity markets came as traders reacted to the data, which reduced pressure on the Federal Reserve to keep raising interest rates.

The benchmark S&P 500 gained 0.6% in early trade, with technology and basic material stocks among the best performers.

The tech-heavy Nasdaq Composite added 0.7% shortly after the New York open. The European Stoxx 600 rose 0.4%, and the German Dax and London’s FTSE 100 both gained 0.6%.

Asian equities were mixed, with Japan’s Topix and South Korea’s Kospi up 0.8% and 0.1%, respectively, while Hong Kong’s Hang Seng index fell 0.8%, and China’s CSI 300 was flat.