Wall Street gains as growth stocks rebound after inflation data

The Labor Department's report showed consumer prices shot up to 8.5% in 12 months through March, slightly higher than estimated 8.4%, although the so-called core CPI fell short of estimates at 6.5%

The Nasdaq led Wall Street's main indexes higher on Tuesday after data showed consumer prices rose largely in line with estimates, taking pressure off high-growth stocks that were hammered on expectations of aggressive U.S. interest rate hikes.
 

The Labor Department's report showed consumer prices shot up to 8.5% in the 12 months through March, slightly higher than the estimated 8.4%, although the so-called core CPI fell short of estimates at 6.5%.
 

"The surprise came in core inflation and this provided some relief to a market that has been very concerned about inflationary pressures," said George Catrambone, head of trading at DWS Group.
 

"I think overall the release is consistent with the 'peak inflation is behind us' narrative, but the bottom line is that inflation remains elevated, multiple 50 bps hikes are still very much on the table."
 

Money markets still see a 93.5% likelihood of a 50 basis point rate hike at the U.S. Federal Reserve's meeting next month, largely unchanged from before the data.
 

The benchmark U.S. 10-year Treasury yield fell to 2.71% after touching 2.83% earlier in the day, a level last seen in late 2018.

The retreat in yields offered relief to megacap growth and technology stocks such as Tesla Inc, Apple Inc and Amazon.com Inc, which rose between 2.2% and 3.8%.
 

Still, the Nasdaq is down nearly 13% this year, the worst performer among the three major indexes.
 

Big U.S. banks are set to kick off the first-quarter results season on Wednesday. Analysts expect them to report a sharp decline in earnings from a year earlier, when they benefited from exceptionally strong dealmaking, trading and funds set aside for loan losses being released.
 

At 10:17 a.m. ET, the Dow Jones Industrial Average was up 243.93 points, or 0.71%, at 34,552.01, the S&P 500 was up 48.24 points, or 1.09%, at 4,460.77, and the Nasdaq Composite was up 246.96 points, or 1.84%, at 13,658.91.
 

The energy sector jumped 2.6%, leading percentage gains among the 11 major S&P 500 sectors, as crude prices jumped over 5% after Shanghai relaxed some COVID-19 restrictions and OPEC warned it would be impossible to replace potential supply losses from Russia.
 

CrowdStrike Holdings Inc jumped 8.2% after Goldman Sachs upgraded the cybersecurity company's shares to "buy", citing elevated demand.
 

Beyond Meat Inc gained 3.6% after it expanded its meatless chicken tenders distribution to 8,000 new retail locations.

Advancing issues outnumbered decliners for a 5.45-to-1 ratio on the NYSE and a 4.08-to-1 ratio on the Nasdaq.
 

The S&P index recorded 15 new 52-week highs and one new low, while the Nasdaq recorded 30 new highs and 62 new lows.