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.
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.
