When the latest inflation report came in worse than expected Thursday morning, the markets responded in expected fashion and immediately tanked. The Dow, for example, fell more than 500 points in early trading, notes CNBC. It was a much different story at the closing bell, however. The Dow surged 827 points on the day, or 2.8%, to 30,038; the S&P 500 rose 92 points, or 2.6%, to 3,669; and the Nasdaq rose 232 points, or 2.2%, to 10,649. So why the turnaround? Analysts were taking their best guesses:
- “Hopefully it's because people have dug into the details of the inflation report and noticed a few signs that we could get inflation relief by the end of the year,” Brian Jacobsen of Allspring Global Investments tells the AP.
- Or because traders thought the initial selloff was too extreme: “What the market is experiencing is the influences of a lot of short-term traders,” Tom Galvin of City National Rochdale tells the Wall Street Journal. Such traders rushed to sell when the inflation report came out, but “once they were done selling, I think markets started to stabilize.”