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Investing.com – The S&P 500 closed at a record Friday, shrugging off the the fastest pace of inflation in 39 years as investors continued to pile into tech stocks as U.S. Treasury yields fell.
The S&P 500 rose 0.95% to close at a record of 4,712.02. The Dow Jones Industrial Average added 0.60%, or 216 points, the Nasdaq climbed 0.73%.
CPI rose 0.8% in November, a tenth of a percentage point more than expected, though the year-on-year consumer prices jumped 6.8%, in-line with expectations and the fastest rate since June 1982.
“People were expecting a very high number and they got it […] that’s why there’s a muted market reaction to this inflation report,” Chief Investment Officer of Opportunistic All Cap Equity Strategy at Spouting Rock Asset Rhys Williams told Investing.com in an interview on Friday.
The multi-decade fast pace of inflation failed to spook the markets as it was largely priced in and comes at a time when investors are expecting the Federal Reserve to speed up the pace of bond tapering and turn more hawkish at its monetary policy meeting next week.
“Powell said two weeks ago that the Fed will discuss increasing the taper and inflation wasn’t transitory … that would suggest that the market is expecting increased hawkishness at the Fed meeting, compared to a month or two ago,” Williams added.
Against the backdrop of in-line inflation, Treasury yields fell sharply, pushing growth sectors of the market – sensitive to rates – tech sharply higher.
As well as falling interest rates, better-than-expected quarterly results from Oracle and Broadcom also supported climb in tech.
Broadcom (NASDAQ:AVGO) rise more than 8% after the chipmaker hiked its quarterly dividend and announced a $10 billion share buyback Thursday after reporting fiscal fourth-quarter results that topped expectations, led by a rebound in enterprise cloud and services demand.
“While FY21 experienced a meaningful rebound in Cloud, FY22 is likely to be characterized by sustained momentum in core enterprise and along with still tight supply and ASP [average selling price] tailwinds especially in 1HCY22, should support another double digit year of rev growth,” Credit Suisse said.
Oracle (NYSE:ORCL) reported fiscal fourth quarter results that topped Wall Street estimates, sending its shares more than 15% higher.
Consumer stables, a defensive corner of the market, was also in the ascendency, led by a more than 5% rise in Costco (NASDAQ:COST) following better-than-expected quarterly results.
In other news, Beyond Meat (NASDAQ:BYND) slipped 8% as Taco Bell reportedly is set to abandon plans to trial Beyond Meat’s plant-based version of carne asada, Bloomberg reported.
