Stock-market futures and bonds rally as PPI offers new hint of easing inflation


U.S. stock futures rallied Tuesday morning after the producer price index for October came in lower than expected. The PPI index slowed to 8% from 8.4% in the 12 months through October, while core price growth slowed to 5.4% from 5.6%. Futures for the S&P 500 rose 78 points, or 2%, to 4,045, while futures for the Nasdaq 100 rose 366 points, or 3.1% to 12,102 after stock futures traded modestly higher before the data. Futures for the Dow Jones Industrial Average rose 405 points, or 1.2% to 33,967. Treasurys also rallied, with Treasury yields falling 9.4 basis points to 3.778%. Treasury yields move inversely to prices. The PPI data, which gauge prices paid by wholesale producers of goods, appeared to mirror a slowdown in consumer-price inflation exhibited by the October CPI released on Thursday. The October CPI report helped to cement expectations that the Federal Reserve will opt for a smaller interest-rate hike in December after four consecutive 75 basis point hikes.

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