STOCK prices increased sharply after the United States announced a lower than expected annual inflation rate to the end of October.
Tech stocks, including Amazon and Meta, formerly Facebook, were among the companies benefitting from the surge on the New York markets.
The biggest increases were seen in the US, but London and Frankfurt also saw jumps, particularly immediately after the announcement of a 7.7 per cent inflation rate.
In the minutes after the 8.30am eastern US time announcement, the FTSE 100 in London jumped nearly 100 points.
The London exchange ended the day at 7,373, up just over one per cent on the opening bell. The German DAX closed up 3.3 per cent.
While the inflation rate was less than expected – analysts were predicting 7.9% - and down from 8.2% in September, the White House warned energy prices will remain volatile amid the continuing occupation of Ukraine by Russia.
“Gas prices are down from their mid-June peak but higher than when Russia invaded,” the White House Council of Economic Advisers said.
Those travelling to the US will also welcome the new Consumer Price Index data as the dollar weakened against both the pound and the Euro.
A lower inflation rate lessens the potential the Federal Reserve will be aggressive in raising interest rates, one of the drivers behind the recent strength of the dollar.
The pound hit 1.17, the highest since September, while the Euro was 1.02 to the dollar, again the highest in more than two months.
At peak yesterday, the S+P 500 was up five per cent, the Nasdaq more than six percent and the Dow Jones approximately three per cent.
Shares of Amazon were up by more 13 per cent while Meta’s price rose by around nine percent. Tesla’s shares also increased dramatically, by more than seven per cent, just days after Chief Executive Elon Musk sold $4bn worth several days ago.
After taking out fuel and food, the most volatile elements on the CPI, the 'core' inflation rate was 6.3 per cent when calculated on an annual basis.
In the US, continuing house and gas, or petrol, price rises continue to drive the inflation rate. Prices at the pump have been decreasing in recent months but went up four percent in October.
Multiple sectors saw decreases in prices, including used cars and trucks, apparel and medical care services. The price of food has been rising more slowly than in previous months, increasing 0.6 per cent from September to October, and rising 10.9 per cent over the last 12 months.
