Stock market today: Dow jumps as bullish bets return ahead of Fed, inflation data

By Yasin Ebrahim

Investing.com -- The Dow jumped Monday, recovering from its biggest weekly loss since September as investors resumed their bullish bets ahead of economic data on inflation and an interest rate decision from the Federal Reserve due later this week.

The Dow Jones Industrial Average gained 1.6%, or 528 points, the Nasdaq Composite rose 1.3%, and the S&P 500 rose 1.4%.

Energy stocks led the gainers as oil prices were buoyed by easing concerns about energy demand after China, the world’s biggest oil importer, moved further away from its zero-COVID policy. Beijing announced plans to stop tracking some travel activity, a move that could cut quarantine measures for travelers to affected COVID regions.

Technology stocks, which broadly fell 3% last week, shrugged off an ongoing climb in Treasury yields as investors looked ahead to further data due Tuesday, expected to show easing inflation pressures.

Economists forecast that the consumer price index rose 0.3% in November and 7.3% in the past 12 months, compared with 0.4% and 7.7% in the prior month, respectively.

Expectations for a further easing in inflation, however, aren’t expected to alter the Fed’s monetary policy plans, with many expecting the U.S. central bank to slow the pace of rate hikes, but signal a higher for longer interest rate regime.

“I think that the expectations are that we will see inflation come down over time, but that doesn't mean that the Fed can turn dovish all of a sudden,” Johan Grahn, Head of ETF Strategy at Allianz told Investing.com’s Yasin Ebrahim in a recent interview.

“They're [the Fed]  going to continue on the hawkish path, but a little bit more carefully … starting out with 50 basis points [on Wednesday] and more likely following that up with 25 basis points hikes,” Grahn added.

Financials were boosted by rising banking stocks, with Goldman Sachs Group (NYSE:GS) recovering from an intraday dip after Bloomberg reported that the investment banking giant is set to make further job cuts as it restructures its consumer banking business.

In other news, Rivian Automotive (NASDAQ:RIVN) slumped 6% after pausing plans to make electric vans in Europe as the loss-making electric vehicle maker looks to conserve cash.