Stocks rise as investors eye key consumer inflation data

Stocks rose on Wednesday as investors ditched higher-than-expected inflation data and looked ahead to a key consumer report that will influence the pace of Fed rate hikes going forward.

The Dow Jones Industrial Average rose 169 points, or 0.58%. The S&P 500 rose 0.28%, boosted by a 10% jump in shares of a company Moderna, the highest gaining stock in the index. The Nasdaq Composite Index is up 0.12%.

Stocks fell between gains and losses earlier in the morning when Producer Price Index for September, a measure of the wholesale price of final demand, came in higher than expected. The reading rose 0.4% in September, more than the consensus estimate of a 0.2% increase, according to Dow Jones.

The Producer Price Index number is one measure of inflation that investors monitor along with the Federal Reserve. If inflation remains high, the central bank will likely continue its aggressive course of raising interest rates to bring it back under control. This means that prices will continue to rise and may remain high for longer than the markets expect, affecting stocks.

Investors will get more inflation data on Thursday, when the CPI report for September is released. The CPI number is a measure of price changes in the basket of consumer goods and public services.

Mike Lowingart, Head of Model Portfolio Creation at Morgan Stanley Global Investments said:. “There is no doubt that the Fed still has work cut out for them, and if tomorrow’s CPI reading is hot, don’t be surprised to see some investors grappling with how long it might take to manipulate inflation.”

The minutes of the Federal Reserve’s September meeting will also be released on Wednesday. While Federal Reserve Chairman Jerome Powell acknowledged that interest rates are increasing dramatically It can be painfulThe central bank will continue to press ahead with its fight to bring down inflation.