US stocks surge, dollar drops after cool inflation report

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US stocks surge, dollar drops after cool inflation report

NEW YORK -Wall Street stocks rose sharply on Friday and the dollar softened as cooler-than-expected inflation data helped investors look past the possibility of a government shutdown and fresh tariff threats from U.S. President-elect Donald Trump.

"The better-than-expected reading for PCE, which is the Fed’s favorite measure of inflation, allowed investors to breathe a sigh of relief because maybe inflation is not likely to be as much of a runaway situation as feared," said Sam Stovall, chief investment strategist of CFRA Research in New York.

"The focus of the market over the last several days has been on the Fed's announcement that while they were lowering interest rates by 25 basis points, that they were going to begin to rein in, and it certainly shook the markets," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York."The potential government shutdown is the other big focus. Markets never like that."rose 656.89 points, or 1.55%, to 42,997.25, the S&P 500 rose 89.

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