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- US stocks surged on Monday ahead of a crucial week of market-moving catalysts.
- The November CPI report will be released on Tuesday, showing the path of inflation as 2022 winds down.
- Meanwhile, the Fed begins its two-day policy meeting Tuesday and will deliver another decision on rates Wednesday.
US stocks soared on Monday with the Dow Jones Industrial Average jumping more than 500 points as investors position their portfolios ahead of a catalyst-filled week that could move stock prices in a big way.
The first potentially market-moving event is the release of the November CPI inflation, which will reveal to investors whether prices are continuing to decelerate, as they did in October. The CPI report will be released on Tuesday, and consensus estimates are for headline monthly and annual inflation of 0.4% and 7.7%, respectively.
The CPI report will be followed up by the Federal Reserve’s December FOMC meeting, which begins Tuesday and ends on Wednesday with a press conference and an interest rate decision from Fed chairman Jerome Powell. The market currently expects an interest rate hike of 0.50%, a slowdown from the Fed’s prior rate hikes of 0.75%.
Merger Monday also helped boost stock prices, as investors digested a flurry of M&A deals totaling more than $70 billion, according to data from Bloomberg. Some of the bigger deals include Amgen buying Horizon Therapeutics for $28 billion, Thoma Bravo buying Coupa Software for $8 billion, and Microsoft purchasing a $2 billion stake in the London Stock Exchange Group.
Here’s where US indexes stood at the 4:00 p.m. ET close on Monday:
- S&P 500: 3,990.56, up 1.43%
- Dow Jones Industrial Average: 34,005.04, up 1.58% (528.58 points)
- Nasdaq Composite: 11,143.74, up 1.26%
Here’s what else happened today:
- Microsoft’s $2 billion acquisition of a 4% stake in the London Stock Exchange will see the stock exchange using Microsoft’s cloud product for the next decade.
- Treasury Secretary Janet Yellen said inflation looks set to slow significantly in the coming year even if there’s no recession, as long as the US economy isn’t rattled by further shocks.
- Billionaire John Paulson’s family office is set to score a $500 million profit from its stake in Horizon Therapeutics after its merger with Amgen.
- Rivian stock fell 6% on Monday as the electric vehicle maker said plans to co-develop electric delivery vans with Mercedes-Benz in Europe have been halted.
- Tesla stock also fell 6% on Monday, and the company could be subject to an increase in pressure from activist investors next year, according to Wedbush.
- The Federal Reserve may have to abandon its 2% inflation target next year as it falls behind in its fight against rising prices because of past policy mistakes, Mohamed El-Erian said.
In commodities, bonds and crypto:
- West Texas Intermediate crude oil rose 3.34% to $73.39 per barrel. Brent crude, oil’s international benchmark, jumped 2.75% to $78.19.
- Gold fell 1.07% to $1,791.40 per ounce.
- The yield on the 10-year Treasury note rose three basis point to 3.61%.
- Bitcoin rose 0.91% to $17,089, while ether jumped 0.77% to $1,256.