--- title: Stocks Soar After Inflation Falls More Than Expected. Here's What's Next description: The stock market is soaring after new Consumer Price Index (CPI) data from November shows that the rate of inflation is slowing. authors: - name: Sarah Hansen role: Senior Writer url: https://money.com/author/sarah-hansen/ bio: Sarah Hansen is a senior writer at Money covering all things personal finance. Previously, she covered economic policy and capital markets on the breaking news desk at Forbes. education: Northwestern University, New York University at_money_since: 2021 articles: 347 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Education - Health and Wellness - Housing - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://www.linkedin.com/in/sarah-m-hansen/ former_staff: true editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Economy and Politics - Banking - Business - Career Advice - Credit - Credit Cards - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2022-12-13T15:32:32.000Z' modified: '2024-01-10T17:45:48.000Z' section: Economy and Politics tags: - inflation - News - stocks word_count: 448 canonical: https://money.com/stocks-soar-after-inflation-falls/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![A trader works at the Closing Bell on the floor of the New York Stock Exchange](https://img.money.com/2022/12/News-Stocks-Soar-After-Inflation-Falls.jpg) The stock market surged on Tuesday after a new report shows the pace of inflation continues to slow. [Data](https://www.bls.gov/news.release/pdf/cpi.pdf) released by the Bureau of Labor Statistics shows that consumer prices rose 0.1% between October and November, down from a rate of 0.4% the previous month. On a yearly basis, prices are up 7.1%, compared to an annual rate of 7.7% in October. Both the monthly and the annual rate of inflation were less than experts predicted. That better-than-expected news sent [stocks](https://money.com/how-to-buy-stocks/) soaring on Tuesday morning: The [S&P 500 Index](https://money.com/how-to-invest-in-sp500/) climbed 2.6% in early trading, while the Dow Jones Industrial Average gained 1.6% and the tech-heavy Nasdaq was up nearly 4%. Some components of the Consumer Price Index (PCI) are still significantly more expensive than they were a year ago, including groceries and rent prices. Prices in other categories — like [used cars](https://money.com/used-car-prices-dropping/) and airline fares — are falling. [Gas prices](https://money.com/gas-prices-cheaper-than-year-ago/), which soared in the wake of this year’s war between Russia and Ukraine and were a major component of the inflation index, dropped between October and November but were still about 10% higher than they were last year. Experts say the rate of inflation is likely to [keep falling in 2023](https://money.com/inflation-2023-expert-predictions/), which is good news for consumers who have seen their budgets stretched by a year of historic price growth. Tuesday’s data comes as investors await a [key decision about interest rates](https://money.com/stocks-rise-fed-interest-rate-comments/) from the Federal Reserve on Wednesday afternoon. The central bank has been raising its benchmark rate for months in an attempt to bring inflation down to more manageable levels. Inflation that's lower than expected "not only validates a Fed decision to slow the pace of rate hikes, it also raises hopes that the inflation surge may actually be tamed within the next 12 months," Seema Shah, chief global strategist at Principal Asset Management, said in email commentary shared with Money. Most experts expect a rate hike of 50 basis points on Wednesday, which would be smaller than the series of [75 basis point increases](https://money.com/fed-interest-rate-hike-september-2022/) we’ve already seen this year. But investors shouldn't celebrate too early. In a market note on Monday, experts at BlackRock [warned](https://www.blackrock.com/us/individual/insights/blackrock-investment-institute/weekly-commentary) that the policy changes needed to bring inflation back down to the Fed's target level "would entail even deeper recessions" than many are predicting next year. "Inflation still isn’t fully handled," writes Callie Cox, investment analyst at eToro, "and it’s easy for markets to get carried away. We may not see new highs until inflation is fully under control." [How Low Could Inflation Go in 2023? Here Are 4 Expert Predictions](https://money.com/inflation-2023-expert-predictions/) [6 Best Short-Term Investments](https://money.com/best-short-term-investments/) [Best High-Yield Savings Accounts of 2022](https://money.com/best-high-yield-savings-accounts/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/stocks-soar-after-inflation-falls/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Economy and Politics", "item": "https://money.com/economy-and-politics/" }, { "@type": "ListItem", "position": 3, "name": "Stock Market", "item": "https://money.com/stock-market/" }, { "@type": "ListItem", "position": 4, "name": "Stocks Soar After Inflation Falls More Than Expected. 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