- Stocks surged as traders maintained their bets on a rate hike in March, despite a data indicating the fastest inflation in nearly four decades, which was about in line with market expectations.
- The S&P 500's gains were led by commodity and retail companies. Tesla and Alphabet led a rally in megacaps. With major banks scheduled to announce their earnings on Friday, financial stocks have lagged.
- Goldman Sachs and Morgan Stanley fell, while Jefferies Financial Group Inc. fell after reporting a 50% drop in fixed-income trading revenue from a year ago.
- The bond market's reaction to the inflation data was subdued, partly because yields have already risen since the beginning of the year, as traders prepare for the Federal Reserve to start raising rates. According to the most recent poll by JPMorgan Chase, positioning in the broad Treasury market was the most net-bearish since late 2017.
- In the last weeks of last year, the US economy increased at a modest pace, but firms' expectations for growth in the next months have cooled in some locations, according to the Fed's beige book survey.
- Fed's Mester said, "The case is quite compelling that we eliminate accommodation".
