U.S. stocks rise after better than expected inflation report

© Pavlo Gonchar / SOPA Images/Sipa via Reuters Connect

By Liz Moyer

Investing.com -- U.S. stocks jumped after new data on producer prices in October provided another sign that inflation is cooling.

At 9:56 ET (14:56 GMT), the Dow Jones Industrial Average rose 282 points or 0.8%, while the S&P 500 was up 1.4% and the NASDAQ Composite was up 2%.

The Labor Department's report on producer prices index rose 8% for the year ending in October, which is below the 8.3% expected and below September’s reading.

Coming after last week's lower than expected consumer price index, the report is giving fresh hope for a lower interest rate increase from the Federal Reserve next month. The idea of a smaller rate hike is something Fed Vice Chair Lael Brainard suggested in remarks on Monday.

The market is betting on a 91% chance of a half-percentage point rate hike at the Fed's December meeting, Reuters reported. That would come after four consecutive increases of 0.75 percentage points.

Taiwan Semiconductor Manufacturing (NYSE:TSM) shares rose 12% after the disclosure that Warren Buffett’s Berkshire Hathaway (NYSE:BRKb) had taken a more than $4 billion stake.

The biggest U.S. retailer, Walmart Inc (NYSE:WMT), raised its full-year forecast for net sales and said it had approved a new $20B share repurchase plan. Its shares rose 7%.

Meanwhile home improvement retailer Home Depot Inc (NYSE:HD) shares fell 0.5% after it topped expectations but kept the full-year forecasts unchanged.

Oil fell. WTI was down 0.9%, to $85.80 a barrel, while Brent crude was down 0.7% to $92.44 a barrel. Gold was flat at $1777.