U.S. futures on the New York Stock Exchange have embarked on their sharpest rally since early 2020 following Friday’s deceleration of CPI inflation data.
Futures tied to the S&P 500 gained 0.5% while those on the Nasdaq went up by 0.7%. Treasury yields also held steady after incurring their largest single-day loss on Thursday in over a decade.
Aside from the positive CPI data, investor sentiment was also boosted by recent reversals in China’s Zero-COVID policy. The recent update significantly decreases the amount of time that travelers to the country are required to spend in quarantine.
Oil also experienced major gains on Friday, with West Texas Intermediate futures surging by $3 to $90 per barrel.
Sonia Meskin, BNY Mellon Investment Management Head of U.S. Macro, stated in a note that she believes that peak inflation is now over. She did warn, however, that inflation may remain fairly inflated over the short term and that “it is also important to not over-emphasize one report for inflation and policy trajectory.”
Despite the CPI’s recent moderation, Federal Reserve chair Jerome Powell insists that there is still “some ways to go” until price stability can be restored.