U.S. stocks closed sharply higher Thursday, with all three major indexes posting their best day of gains since 2020 as investors cheered signs that U.S. inflation finally might be headed lower.
The Dow Jones Industrial Average DJIA, +3.70% shot up about 1,198 points, or 3.7%, ending near 33,712, marking its highest level since August and its best daily percentage gain since May 2020, according to Dow Jones Market Data. The S&P 500 index SPX, +5.54% gained 5.5% and the Nasdaq Composite Index COMP, +7.35% closed up 7.4%, their best daily percentage increases since 2020. The sharp rally on Wall Street was led by gains in technology and communication shares, segments of the S&P 500 that booked massive gains of about 8.3% and 6.3%, respectively, according to FactSet. Buyers came out in force after the release of October’s consumer-price index showed a 7.7% annual rate of inflation, down from 9.1% this summer, while spurring hopes that the Federal Reserve might be making headway in its fight to bring inflation down to its 2% target. That took some of the attention off the ongoing woes at crypto exchange FTX, with bitcoin BTCUSD, -5.12% down near a 2-year low. The 10-year Treasury rate also dropped to about 3.8% Thursday, down from a 4.2% high in October ahead of the three-day weekend for the U.S. bond market, which will remain closed on Friday for Veterans Day. U.S. stock exchanges, however, will remain open Friday.