S&P 500 and Nasdaq rise to start December amid growing hope that inflation is easing

The S&P 500 and Nasdaq Composite rose slightly Thursday after some inflation data closely watched by the Federal Reserve came in cooler than expected.

The S&P 500 gained 0.3%, while the Nasdaq Composite added 0.5%. The Dow Jones Industrial Average dipped 103 points, or 0.3%, as a 9% drop in Salesforce weighed on the 30-stock index. The move came on news that co-CEO Bret Taylor was stepping down.

Markets saw a boost following the release of the October Core Personal Consumption Expenditures Index, a closely watched gauge of spending. October data showed the index rose 0.2%, below the consensus estimate of 0.3% collected from economists by Dow Jones. The 10-year Treasury yield decreased after the report.

The moves followed a sharp rally Wednesday, with the Nasdaq Composite and the S&P snapping three-day losing streaks after Powell appeared to confirm a slowdown in the central bank’s tightening — a question that’s lingered in recent weeks.

“Whether intentional or not, Powell sent a message that, in light of the tightening that’s already been done, he’s now more focused on the growth outlook and the employment picture than he is on bringing down inflation to 2%,” said Chris Senyek, chief investment strategist at Wolfe Research.

Wednesday also marked the end of a winning month for the major averages. The Nasdaq rose 4.37% — its second positive month in a row for the first time since a three-month streak ending December 2021. The S&P 500 and Dow rose 5.38% and 5.67%, respectively, to finish their second month of gains for the first time since August 2021.

Dollar General dropped 8% after it cut its full-year forecast, citing higher costs. On the other hand, Okta shot up nearly 19% after the identity management software company issued an upbeat full-year financial outlook, while Five Below gained about 11% after it reported an earnings beat.