Why stocks scored a historic bounce after another hot inflation report

Equity investors can be forgiven for feeling a little stunned after a day that saw stocks plummet in reaction to another round of warmer-than-expected inflation data, only to then climb and extend gains to the bell of closure.

What gives: Are investors suddenly in agreement with inflation? It is not likely. But market pundits cited a number of factors that set the stage for a rebound.

“While I certainly wouldn’t classify this morning’s capitulation, the stock market is handling disappointing inflation reports much better than it did recently,” Mark Arbeter, president of Arbeter Investments LLC, said in a statement. an evaluation.

Here’s how it built up. The industrial average of the Dow Jones
+ 2.83%
It fell just below 550 points, or 1.88%, but ended the day up 827.87 points, or 2.8%, at 30,038.72. It was the first time the Dow Jones rose at least 800 points on the same trading day as it fell at least 500 points to its low, according to Dow Jones Market Data.

Most relevant, on a percentage basis, the 5.16% swing between the Dow’s intraday high and low was the largest gap since April 6, 2020. The last time the Dow gained at least 3% at the close of a day that it had dropped as much as 1.88% was August 9, 2011.

The S&P 500
+ 2.60%
it closed 2.6% higher after falling 2.39% to the session low. The last time the S&P 500 gained at least 2.5% at the close of one day …

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