US Stocks Soar Ahead Of Inflation Data, Fed Meeting

US stock indexes rose overnight, lifted in part by gains by Microsoft and Pfizer, as investors braced for key inflation data later on Tuesday and a policy announcement from the Federal Reserve later in the week.

Microsoft rose 2.89 percent following the tech giant's deal to buy a 4 percent stake in the London Stock Exchange Group, helping to boost each of the three major indexes.

Consumer inflation data will be closely monitored today, and is expected to show that prices increased by 7.3 percent in November on an annual basis, slowing from the 7.7 percent rise in the previous month. The "core" reading, which excludes food and energy, is expected to show a 6.1 percent increase, down from 6.3 percent in October.

A cooler than expected inflation report would help support the belief that aggressive policy actions taken by the Fed this year to slow the economy are taking hold. The central bank is widely expected to hike by 50 basis points on Wednesday, which would mark a step down from the hikes of 75 basis points in the last four meetings.

Fears the Fed could make a policy mistake and tilt the economy into a recession have weighed heavily on Wall Street this year, with the S&P 500 down about 16 percent and on track for its first yearly drop since 2018 and largest percentage drop since 2008.

Pfizer shares gained 0.91 percent for the day after the drugmaker gave revenue forecasts from vaccines across its portfolio.

Biotech firm Horizon Therapeutics surged 15.4 percent following a buyout offer from Amgen, while Coupa Software soared 26.7 percent after agreeing to sell itself to the private equity firm Thoma Bravo. (Reuters)