NEW YORK (AP) 鈥� Wall Street rose to its highest level since early 2022, just a bit below its record high, after a report showed inflation in the United States is behaving pretty much as expected. The S&P 500 climbed 0.5% Tuesday. The Dow rose 0.5%, and the Nasdaq composite added 0.7%. Treasury yields were mixed after the November update on inflation roughly matched economists鈥� expectations. Traders still expect the Federal Reserve to stand pat on interest rates when it announces its next move Wednesday afternoon. The report did cast some doubt on when rates may come down.
THIS IS A BREAKING NEWS UPDATE. AP鈥檚 earlier story follows below.
NEW YORK (AP) 鈥� Wall Street is rising Tuesday toward its best level in nearly 23 months, just a bit below its record high, after a report showed in the United States is behaving pretty much as expected.
The S&P 500 was 0.4% higher in late trading and only 3.2% below its all-time high. Dow Jones Industrial Average was up 180 points, or 0.5%, as of 3:20 p.m. Eastern time, and the Nasdaq composite was 0.6% higher.
Big Tech stocks helped lead the way following solid gains for Nvidia, Meta Platforms and some other of Wall Street's largest and most influential stocks. They overshadowed an 11.9% tumble for Oracle, whose revenue for the latest quarter fell short of analysts鈥� forecasts. Icosavax also jumped 47.8% after AstraZeneca said it would buy the biopharmaceutical company for at least $838 million in cash, with the price tag rising if certain milestones are met.
But Wall Street鈥檚 spotlight was on the inflation report, which showed U.S. consumers paid prices for gasoline, food and other living costs last month that were 3.1% higher than a year earlier. That was a slight deceleration from October鈥檚 3.2% inflation and exactly in line with economists鈥� expectations.
The data likely changes nothing about what the will do at its latest meeting on interest rates, which ends Wednesday. The widespread expectation is still for the Fed to keep its main interest rate steady.
The Fed has already drastically yanked its main interest rate from virtually zero early last year to more than 5.25%, its highest level since 2001. It鈥檚 hoping to slow the economy and hurt investment prices by exactly the right amount: enough to stamp out high inflation but not so much that it causes a steep recession.
Recently rising hopes that the Fed can manage such an 鈥渋mmaculate鈥� landing for the economy have helped stocks to rally and bets to rise that the Fed鈥檚 next move on interest rates will be to cut sometime in 2024, perhaps as early as March.
Cuts to interest rates can juice prices for stocks and other investments, while offering more oxygen for the overall economy and financial system.
Following the inflation report, traders were betting on a nearly 42% chance of a cut happening by March, according to data from CME Group. But a minority are also still betting on the possibility that rates could stay high for longer than expected.
Seema Shah, chief global strategist at Principal Asset Management, pointed to a slight acceleration in inflation when looking at how prices changed from October into November rather than from a year earlier.
鈥淪imply put,鈥� she said, 鈥渢his isn鈥檛 enough inflation deceleration to reassert or justify the market鈥檚 policy easing expectations,鈥� particularly when the job market remains solid.
Other analysts and investors said they expect Fed Chair Jerome Powell to use the numbers to try to push back on traders鈥� growing conviction that rate cuts will come in the early part of 2024. Powell himself has already recently said it鈥檚 too early to consider when cuts could arrive.
In the bond market, Treasury yields mixed following the inflation data. The 10-year Treasury yield fell to 4.20% from 4.24% late Monday.
The two-year yield, which moves more on expectations for action from the Fed, held steady at 4.71%.
On Wall Street, fell 1.7% after it said it's taking its buyout offer for Wyndham Hotels & Resorts directly to its rival's shareholders. Choice already owns 1.5 million shares of Wyndham, whose board has cited concerns about value and regulatory approval while rebuffing Choice in the past.
Toymaker slipped 0.9% after it announced additional job cuts as part of its cost-cutting program.
On the winning side of Wall Street, Centene rose 3.3% for one of the biggest gains in the S&P 500. The managed care company gave a forecast for earnings in 2024 that topped analysts' expectations, and it also authorized a program to buy back up to $4 billion more of its stock.
In stock markets abroad, indexes were holding relatively steady in Europe and mostly higher in Asia.
The FTSE 100 in London was virtually unchanged after the Office for National Statistics reported a sharp slowdown in growth for wages. That could help weigh on inflation and shape the Bank of England鈥檚 upcoming decision on interest rates Thursday.
Crude oil prices fell to take some more pressure off inflation. A barrel of benchmark U.S. crude lost $2.71 to settle at $68.61. It had been above $93 in September but has been coming down amid worries about demand from the global economy failing to keep up with available supplies.
Brent crude, the international standard, fell $2.79 to $73.24 per barrel.
Stan Choe, The Associated Press
