Stock market news live updates: Stocks surge after inflation reading comes in cooler than expected

U.S. stocks surged Tuesday after new inflation data provided fresh signs that prices may be cooling.

The S&P 500 (^GSPC) jumped by 1.5% during midday trading, while the Dow Jones Industrial Average (^DJI) advanced by 0.7%. The technology-heavy Nasdaq Composite (^IXIC) rose by as much as 2.5%.

October’s producer price index (PPI) declined to 8% annually, down from 8.5% in September, after economists surveyed by Bloomberg forecasted 8.3%. Annual core PPI also surprised at 6.7% year over year, compared to a consensus estimate of 7.2%. The PPI report comes after other key inflation data came in lower than expected last Thursday, with consumer prices rising 0.4% in October and core prices adding 0.3%.

“Core PPI and the core PCE deflator follow very similar tracks, though the surge in rents this year has driven an unusually large wedge between them,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note following the PPI release. “But the pace of rent increases has…

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