Stocks bounce back sharply from trade-related woes.
U.S. stocks rebounded sharply Thursday, with the Dow climbing 200 points after government data showed the fastest pick up in consumer inflation in six years.
Dow industrials (NYSEARCA:DIA) jumped 224.74 points, or 0.9%, to close at 24,924.89. The blue-chip index declined triple digits in midweek trade.
The large-cap S&P 500 Index (NYSEARCA:SPY) advanced 0.9% to 2,798.29, with nine of 11 primary sectors reporting gains. The bulk of the advance was concentrated in information technology, industrials and healthcare.
Meanwhile, the technology-focused Nasdaq Composite Index (NYSEARCA:QQQ) surged 1.4% to 7,8123.92, a new all-time high.
A measure of implied volatility known as the CBOE VIX (NYSEARCA;VXX) declined for the fifth time in six sessions on Thursday. The so-called “fear index” closed down 8.3% at 12.55, on a scale of 1-100 where 20 represents the historical average.
In economic data, the U.S. consumer price index (CPI) rose 0.1% in June, which translated into a year-over-year gain of 2.9%, the Labor Department reported Thursday. The annual growth rate was the largest in six years.
So-called core inflation, which strips away food and energy costs, rose 0.2% on month and 2.3% annually.
Initial jobless claims, a proxy for firings in the labor mark, fell by 18,000 to a seasonally adjusted 214,000 in the first week of July. That was the lowest level in 50 years.
The Final Word: Rising inflation is a sure sign that the Federal Reserve will resume its policy of raising interest rates in the remainder of the year. Fed officials are scheduled to meet at the end of the month but are not expected to hike interest rates at that time.