Us Stocks End Sharply Higher, Dollar Drops After Inflation Report

Wall Street surged on Friday and the dollar softened as cooler-than-expected inflation data helped investors look past the possibility of a government shutdown and fresh tariff threats from US President-elect Donald Trump.

All three major US stock indexes jumped more than 1, gold surged and benchmark US Treasury yields eased from multi-month highs.

A report from the Commerce Department showed the PCE price index, the Federal Reserves preferred inflation yardstick, came in cooler than analysts expected, supporting the narrative that price growth remains on a path toward achieving the US central banks 2 target.

The better-than-expected reading for PCE, which is the Federals favorite measure of inflation, allowed investors to breathe a sigh of relief because maybe inflation is not likely to be as much of a runaway situation as feared, said Sam Stovall, chief investment strategist of CFRA Research in New York.

Equity markets came under pressure throughout a busy week for central banks, led by the US Federal Reserve, which signaled it would slow the pace of interest rates in the coming year.