U.S. stock gauges rallied Wednesday, booking a fourth consecutive gain after investors shook off initial anxieties prompted by a key consumer-inflation reading that showed the strongest monthly rise in five months. Wall Street had been fretted that the Federal Reserve would be able to counteract the effects of a rapid clip in 2018. However, these jitters subsided as investors shifted to focus on healthy earnings and an economy that appears to be relatively solid, underlining the view that a long time ago for equities was abating. Check out: Why this investment pro thinks inflation fears are overblown And read: Higher wages spook Wall Street, but fresh fears of inflation look overdone What did the main benchmarks do? The Dow Jones Industrial Average DJIA, + 1.03% rose 253.04 points, or 1%, to 24,893.49. The blue-chip average Goldman Sachs Group Inc . GS + 2.76% , International Business Machines Corp . IBM, + 2.66% , Caterpillar Inc . CAT + 2.66% and J. P. Morgan Chase & Co . JPM, + 2.31% . The S & P 500 index SPX, + 1.34% advanced 35.69 points, or 1.3%, to 2.698.63, with seven of its 11 finite sectors finishing, led by financials and technology shares. The Nasdaq Composite Index COMP + 1.86% , meanwhile, enjoyed the session’s best return among the leading equity gauges, up 130.10 points, or 1.9%, at 7,143.62. Also notable, the small-cap-focused Russell 2000 index RUT, + 1.82% , which has mostly been left over the index, closed up 1.8% at 1.522.10, marking its best daily advance . The advance for the three main benchmarks was based on FactSet data. What’s driving markets? Inflation scares that were responsible for the stock-market. But the main equity gauges recovered from the initial shock to trade higher. The cost of rent, clothes, gasoline, health care and auto insurance all rose, contributing to the 0.5% jump in the consumer-price index . Core inflation, which strips out volatile food and energy prices, rose by 0.3%. Analysts said stronger inflation data may force the Fed to be more aggressive in tightening policy, which may be undercut buying in stocks. Despite the inflation, the market has not changed much, market participants said. The year-over-year increase in the CPI was unchanged from December at 2.1%. The 12-month rate of core inflation was also flat at 1.8%, slightly below the Fed’s 2% annual target. The Cattle Volatility Index The rally for equities also VIX -22.87% , which reflects bullish and bearish options on the S & P 500, and typically moves inversely to stocks, sank 2% to 19.24. Volatility has been resurgent amid concerns about rising yields and inflation. Read: Here’s a 10-step plan And see: This market is overdue, but now it looks overdone What are strategists saying? “Clearly with this kind of a movement for the fourth day in a row,” said Randy Frederick, Managing Director of Trading and Derivatives at the Schwab Center for Financial Research. , referring to the recent pullback for stocks that brought back benchmarks from their peaks in late January. Frederick said the S & P 500 is at some 2,644.52. Market technicians look at moving ahead to gauge short-term and long-term trends. “What’s different about the moves today is what we’ve seen in the last two weeks of the year, we’ve broken the correlation between the yield of 10-year and the stock market,” said Art Hogan, chief market strategist at regional broker B. Riley FBR, referring to the market’s tendency to lose altitude as pink yields, reflecting climbing borrowing costs for corporations. “Anything with inflation seems like a hot button nowadays, but it is a bit of a red herring here: And while inflation is rising, “said Karyn Cavanaugh, senior market strategist at Voya Financial. “At this point it’s not inflation, and the Fed will not pull the trigger that fast,” said Cavanaugh. The Fed’s hand “may be forced if data on inflation continues to come in higher than expected. The added risk is that the [Federal Open Market Committee] in 2018 is not the same as the FOMC in 2017, “said Kristina Hooper, chief global market strategist at Invesco. What other data are in focus? Meanwhile, instead of a forecast rise, sales at U.S. retailers by 0.3% in January – the biggest drop in almost a year – a lot of declines at auto dealers and home centers. And has been reported to increase in sales in December was wiped out. In other data, business inventories in the US rose 0.4% in December after a similar gain in the prior month.
Which stocks look like key movers? Fossil Group Inc. ‘S stock FOSL, + 87.72% 88 times after the watch seller Late Tuesday posted better-than-expected earnings and KeyBanc analysts hiked their price target . Chipotle Mexican Grill Inc. ‘S shares CMG, + 15.35% rallied 15.4% after the burrito chain late Tuesday named a new CEO Brian Niccol, previously the CEO for Yum Brands Inc. ‘s YUM, + 0.14% Taco Bell business. In earnings news, Hilton Worldwide Holdings Inc.
HLT, + 3.32% beat profit forecasts, sending shares 3.3% higher. Molson Coors Brewing Co.
TAP + 6.27% pink shares 6.3% after better-than-expected earnings results. Netflix Inc.
NFLX, + 2.99% shares jumped about 3% after the New York Times reported that the company has hit one of Hollywood’s top TV hitmakers, producer Ryan Murphy in a deal worth as much as $ 300 million. What are other assets doing? European stocks
SXXP, + 1.07% finished the session Asian markets finished mixed . Gold futures GCG8, + 1.76% settled in the green, up 0.8% at $ 1,326.40 an ounce, oil futures
CLH8, + 2.62%
rebounded from an early decline to settle up and the ICE U.S. Dollar Index
DXY, -0.84% erased inflation-fueled gains to trade 0.2% lower at 89.536. The yield on the 10-year Treasury note TMUBMUSD10Y, + 2.73% rose 7.6 basis points to 2.913%, marking the highest yield since Jan. 9, 2014, according to WSJ Market Data Group. -Victor Reklaitis contributed to this article