Late on Tuesday, the House of Representatives passed a bill aimed at preventing a government shutdown. The legislation is now set to go to the Senate for a vote, and if approved, it will then be sent to President Joe Biden for final approval. Without a funding bill, the federal government is scheduled to shut down at 11:59 p.m. ET on Friday.
During the regular session, the S&P 500 rose by 1.9%, while the Nasdaq Composite surged approximately 2.4%, marking the best day for both indexes since April. The Dow Jones Industrial Average gained nearly 490 points, or 1.4%.
These gains followed the release of October’s consumer price index (CPI), a crucial inflation metric, which showed a flat monthly basis, contrary to the 0.1% increase expected by economists surveyed by Dow Jones. Investors responded positively, hoping that the lower-than-expected inflation could lead the Federal Reserve to reconsider its rate-hiking strategy.
Ross Mayfield, an investment strategy analyst at Baird, noted that the CPI report supported a disinflationary trend and a cooling economy, strengthening the case against the Fed raising interest rates in December. Mayfield expressed doubt about the likelihood of the U.S. central bank cutting rates in the near term, citing the robust housing market. the House of Representatives
On Wednesday, investors will be monitoring earnings reports from companies such as Target, JD.com, Advance Auto Parts, and TJX. Additionally, October’s producer price index, a measure of wholesale prices, will be released.