Stock Market Today: Asian Stocks Mixed Ahead of Fed Rate Decision – The Associated Press

NEW YORK (AP) — Wall Street rose to its best level in nearly 23 months, just shy of its record high, after a report Tuesday showed inflation in the United States is behaving broadly as expected.

The S&P 500 rose 0.5%, just 3.2% below its all-time high set early last year. The Dow Jones Industrial Average gained 173 points, or 0.5%, and the Nasdaq Composite rose 0.7%.

Big Tech stocks helped lead the way after Nvidia, Meta Platforms and several other of Wall Street’s biggest and most influential stocks posted solid gains. They outpaced a 12.4% decline at Oracle, whose revenue fell short of analysts’ forecasts in the latest quarter.

But Wall Street’s main focus was on the inflation report, which showed that U.S. consumers paid prices for gasoline, groceries and other living expenses last month that were overall 3.1% higher than a year earlier. That was a slight slowdown from October’s 3.2% inflation rate and was right in line with economists’ expectations.

The data likely won’t change what the Federal Reserve will do at its final interest rate meeting, which ends Wednesday. The widespread expectation is still that the Fed will keep its key interest rate stable.

The Fed already cut its key interest rate early last year from near zero to over 5.25%, the highest level since 2001. It hopes to slow the economy and reduce investment prices by just the right amount: enough to curb high inflation not so much that there is a severe recession.

Recent rising hopes that the Fed can deliver such a “flawless” landing for the economy have helped stocks rally and increased bets that the Fed’s next rate hike will come sometime in 2024, perhaps as early as March , will be a reduction.

Interest rate cuts can drive up the prices of stocks and other assets while providing more oxygen to the overall economy and financial system.

After the inflation report, traders bet on a nearly 42% chance that the Fed will cut interest rates by March, according to data from CME Group. However, a minority is still betting that interest rates could remain high for longer than expected.

Seema Shah, chief global strategist at Principal Asset Management, pointed to a slight acceleration in inflation when she looked at how prices changed from October to November rather than last year.

“Simply put,” she said, “this is not enough of an inflation slowdown to reinforce or justify the market’s monetary easing expectations,” particularly if the labor market remains solid.

Other analysts and investors expect Fed Chairman Jerome Powell will use the numbers to try to counter traders’ belief that interest rate cuts will come in early 2024 in his news conference on Wednesday. Powell himself recently said it was too early to consider when cuts might occur.

In the bond market, Treasury yields were mixed following the inflation data. The 10-year Treasury yield fell to 4.20% from 4.24% late Monday.

The two-year Treasury yield, which is more closely linked to expectations of Fed action, remained stable at 4.71%.

On Wall Street, Choice Hotels International fell 1.9% after the company said it would take its takeover bid for Wyndham Hotels & Resorts directly to its rival’s shareholders. Choice already owns 1.5 million shares of Wyndham, whose board has raised concerns about value and regulatory approval and has rebuffed Choice in the past.

Toy maker Hasbro fell 1.1% after announcing further job cuts as part of its cost-cutting program.

On Wall Street’s winning side, Centene rose 2.8%, marking one of the bigger gains in the S&P 500. The managed care company gave a 2024 profit forecast that beat analysts’ expectations and also approved a program to buy up $4 billion more of its shares.

Icosavax rose 49.5% after AstraZeneca said it would buy the biopharmaceutical company for at least $838 million in cash, with the price rising if certain milestones were met.

Overall, the S&P 500 rose 21.26 to 4,643.70. The Dow rose 173.01 to 36,577.94 and the Nasdaq gained 100.91 to 14,533.40.

On the stock markets abroad, the indices remained relatively stable in Europe and rose predominantly in Asia.

The FTSE 100 in London was virtually unchanged after the Office for National Statistics reported a sharp slowdown in wage growth. This could help weigh on inflation and influence the Bank of England’s upcoming interest rate decision on Thursday.

Crude oil prices fell to ease some of the pressure on inflation. A barrel of benchmark U.S. crude lost $2.71 to trade at $68.61. In September the price was over $93 but has fallen amid concerns that demand from the global economy would not keep up with available supply.

Brent crude, the international standard, fell $2.79 to $73.24 a barrel.