Stocks Soar in November as Inflation Eases and Recession Fears Subside

According to Yahoo News, stocks concluded November on a high note, with the Dow Jones Industrial Average surging 520 points on Thursday, resulting in the largest monthly gain in over a year. The Dow increased by 1.5% to close at 35,951, as investors were encouraged by a new government report indicating that inflation continues to decline. The Personal Consumption Expenditures index, the Federal Reserve's preferred inflation measure, dropped to 3.5% in October, excluding unstable food and energy prices, down from 3.7% the previous month and almost 5% in May, according to new labor data. Analysts at Pantheon Macroeconomics described the progress as 'startlingly rapid' compared to policymakers' expectations. The significant decrease in inflation since the Consumer Price Index peaked at 9.1% in June 2022 has raised investor hopes that the Fed will abandon its efforts to curb economic growth by increasing borrowing costs. Some Wall Street analysts now predict that the central bank could reduce its benchmark interest rate by mid-2024. Wall Street analysts are also growing more confident that the U.S. will avoid a recession despite the Fed's aggressive efforts to combat inflation. Although job growth has slowed, pushing the nation's unemployment rate to 3.9%, the highest level since January 2022, most economists now believe the labor market will not experience the severe downturn that has historically followed rapid interest rate increases. All three major stock indexes experienced solid gains in November. The Dow increased by 8.8%, the broader S&P 500 added 8.9% (its largest monthly increase since July 2022), and the tech-heavy Nasdaq jumped nearly 11% in November, driven by robust corporate profits. Quincy Krosby, chief global strategist for LPL Financial, described the rally as 'dramatic in its move.' She added, 'What you want to see is that next leg up as we close the year. November is a strong month for the market, but so is December.' The Associated Press contributed to this report.