U.S. stocks moved higher Thursday after hot inflation data and surging bond yields sparked a sell-off in technology stocks Wednesday.
The S&P 500 ticked up 0.4%. The tech-heavy Nasdaq Composite gained 0.8%. The Dow Jones Industrial Average traded near the flatline, weighed down by Disney.
The major averages pulled back Wednesday after a hot inflation report pushed up bond yields. The rise in yields especially pressured growth pockets of the market like tech stocks.
The consumer price index, which tracks a basket of products ranging from gasoline and health care to groceries and rents, rose 6.2% in October from a year ago, hitting its highest level in three decades.
“Inflation remains stubbornly high, to the surprise of many that expected prices to come back to earth sooner,” said Ryan Detrick, chief market strategist for LPL Financial. “The truth is you can’t shut down a $20 trillion economy and not feel some bumps as it restarts, but we are hopeful the supply chain issues will resolve over the coming quarters and inflation should calm down as well.”
Following the CPI data, traders moved up their expectations for when the first Fed rate hike would occur. The Fed funds futures market now sees greater odds of the central bank’s first full rate hike coming in July 2022.