(Reuters) – U.S. stock index futures rose sharply on Tuesday after a smaller-than-expected rise in U.S. consumer prices boosted bets that the Federal Reserve would ease its aggressive rate hike stance.
The U.S. Labor Department’s report showed that consumer prices increased by 7.1% on an annual basis in November following a 7.7% rise in October. Economists were expecting 7.3% rise last month.
The core rate, which excludes volatile food and energy prices, rose 6%, against expectations of 6.1%, following a 6.3% rise in October.
Expectations that the U.S. central bank will increase the benchmark rate by 50 basis points on Wednesday shot up to 97%with the rates seen peaking in May 2023 at 4.86%.
At 8:32 a.m. ET, Dow e-minis were up 849 points, or 2.5%, S&P 500 e-minis were up 114.75 points, or 2.87%, and Nasdaq 100 e-minis were up 411 points, or 3.51%.
(Reporting by Ankika Biswas in Bengaluru; Editing by Anil D’Silva)