The S&P/ASX 200 Index (ASX: XJO) has opened the day notably higher and is on course to end the week with a very strong gain.
At the time of writing, the benchmark index is up an impressive 2.5% to 7,140.4 points. This follows a stellar night on Wall Street after the latest US inflation data came in lower than expected.
According to CNBC, October's US consumer price index rose 0.4% for the month and 7.7% from a year ago. Whereas economists were expecting increases of 0.6% and 7.9%, respectively.
This has sparked hopes that inflation has now peaked and the US Federal Reserve will slow its interest rate hikes.
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ASX 200 tech shares rocket
One area of the market that is performing very positively is the beaten down tech sector. This follows a whopping 7.35% gain by the Nasdaq index on Wall Street last night.
Here's a summary of how some ASX 200 tech shares are performing on Friday morning:
- Altium Limited (ASX: ALU) share price is up 8%
- Block Inc (ASX: SQ2) share price has jumped 11%
- WiseTech Global Ltd (ASX: WTC) share price has risen 9%
- Xero Limited (ASX: XRO) share price is up 10%
This has led to the S&P ASX All Technology index rising a sizeable 6% so far today.
Will the rally last?
Analysts at Wolfe Research have warned investors not to get too excited by this inflation reading. It said:
We wouldn't be surprised to see some near-term follow through on this morning's very strong rally, including the S&P 500 trading up toward its 200-day moving average into the 4050-4100 range. However, this morning's report does not make us change our views that the FOMC will ultimately hike the fed funds rate to between 5%-6% and that a demand-driven recession will hit next year.
