All financial indices ticked higher, even though economic data showed inflation at its highest level since 1982. Investors are confident that inflationary pressures are at their peak, which means good news for the economy.
According to data published by the Labor Department on Wednesday, the US inflation rate rose to 7% in December compared with 6.8% in November.
A few factors are causing a recent rotation away from growth stocks with the US labor market, the impending interest rate hikes by the Federal Reserve, and a sluggish global economy all being implicated.
Stocks are on the rise after their recent downfall. On Tuesday, Federal Reserve Chair Jay Powell committed to confronting high inflation and predicted that supply chain issues would eventually ease this year.
JPMorgan analysts have found that higher yields won’t cancel out the upside for the market. Economic growth exceeds expectations in developed markets – especially the US – and China’s economy is poised to rebound.