In a significant development on Wednesday, U.Smarkets responded positively to the December Consumer Price Index (CPI) data, which aligned with expectations, leading to a remarkable rebound in all three major indicesThe Nasdaq Composite, which had experienced five consecutive days of decline, saw a sharp turnaroundThe Dow Jones Industrial Average surged by over 700 points, marking its most substantial one-day increase since November 2024.

As the trading day concluded, the Dow Jones saw an increase of 703.27 points, translating to a 1.65% rise, closing at 43,221.55. The Nasdaq rose by 466.84 points, or 2.45%, ending at 19,511.23, while the S&P 500 experienced a gain of 107.00 points, or 1.83%, culminating at 5,949.91. Notably, tech giants like Meta and Nvidia enjoyed gains exceeding 3%, with Tesla witnessing an impressive rise of 8%.

Across the Atlantic, European markets also mirrored this upward trend

The German DAX 30 index climbed by 329.31 points, or 1.63%, closing at 20,590.72. The UK's FTSE 100 recorded an increase of 96.49 points, or 1.18%, reaching 8,298.03. Meanwhile, France's CAC 40 index rose by 50.92 points, translating to a 0.69% increase, ending at 7,474.59. The European Stoxx 50 index appreciated by 54.28 points, a gain of 1.09%, finishing at 5,034.75. Not to be left behind, Spain's IBEX 35 index rose by 148.64 points, or 1.26%, and Italy's FTSE MIB jumped 521.41 points, equivalent to 1.48%, closing at 35,646.00.

In the Asia-Pacific region, mixed sentiments were notedThe Nikkei 225 index showed a slight decline, while the Jakarta Composite Index in Indonesia surged by 1.77%. The South Korean KOSPI index also experienced minor dips.

Precious metals also exhibited movements, with spot gold seeing an increase of 0.64% to $2,694.55 per ounce, and COMEX gold futures rising by 1.39% to $2,719.70 per ounce

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Meanwhile, crude oil prices showed significant upward momentumLight crude oil futures for February delivery rose by $2.54, ending at $80.04 per barrel, which marked a 3.28% increaseSimilarly, March delivery Brent crude futures increased by $2.11, closing at $82.03, reflecting a gain of 2.64%. This surge in oil prices was attributed to new sanctions from Western countries against Russia, impacting global oil supply, compounded by tightening U.Sinventories.

In the foreign exchange markets, the dollar index, which measures the dollar against six major currencies, fell by 0.17%, closing the day at 109.089. The euro exchanged at 1.0293 against the dollar, slightly down from the previous day's 1.0298, while the British pound traded at 1.2231, up from 1.2200. The yen reflected a weaker dollar, exchanging at 156.46 yen, down from 157.94. Other notable currencies showed mixed movement against the dollar as well.

On the macroeconomic front, December's core CPI data raised some eyebrows, with inflation expectations building as the core CPI landed slightly below forecasts at an annualized rate of 2.9%. This represents a rebound for the third consecutive month, aligning with market projections, and up from a previous 2.7%. The core CPI decreased to 3.2%, marking a new low since August 2024, against an anticipated flat reading of 3.3%. Notably, food prices continued their trend, with major grocery items rising in price.

The Federal Reserve's Beige Book, which presents anecdotal information on economic conditions, indicated a general uptick in prices, forecasting continued inflationary pressure into 2025. Respondents highlighted gradual increases in sales prices, particularly within retail and manufacturing sectors

Input costs have also shown a rising trend, specifically in insurance prices, partly reflecting healthcare expensesMeanwhile, OPEC expressed optimism regarding global economic growth, expecting it to maintain strength amid stable growth in major economies, hinting at a continuation of 3.2% growth into 2026.

In corporate news, the stock landscape appeared favorable for the automotive sector, particularly Tesla, which soared following the CPI report that indicated a slower inflation rate might pave the way for reduced interest ratesShares of Rivian, General Motors, and Ford also experienced gains, but Tesla's rise was particularly pronouncedBarclays analyst Dan Levy raised Tesla's target price, potentially reflecting investor confidence in the brand despite ongoing controversies surrounding CEO Elon Musk and the SEC lawsuits.

Nvidia's meteoric rise was equally noteworthy, as the company’s market capitalization reached and surpassed an astounding $3 trillion, driven significantly by the AI boom prompted by applications such as ChatGPT