Wall Street Rallies Amid Cooling Inflation Troubles

Wall Street stocks saw a significant rise as inflation data came in below expectations, reducing fears of a government shutdown and tariffs. The Commerce Department's report supported the view that inflation is on track to meet the Federal Reserve's targets, calming investor concerns about aggressive interest rate hikes.

Wall Street experienced a robust surge on Friday, buoyed by inflation data that came in cooler than anticipated. This development helped investors shift focus away from potential risks, including a possible government shutdown and new tariff threats from President-elect Donald Trump.

The Commerce Department released data indicating that the PCE price index, a key inflation measure for the Federal Reserve, was lower than expected. This supported a narrative that inflation remains within the Fed's desired path to its 2% target, bringing relief to investors worried about runaway inflation.

Despite a busy week dominated by central bank activities, Republican leaders in the U.S. House of Representatives committed to a vote to prevent a federal government shutdown. Global markets, however, showed mixed results, reflecting the complex dynamics at play in the current economic environment.

(With inputs from agencies.)