US Stocks Defy Inflation Fears with Surprising Gains

US stocks experienced a surprise surge on Friday despite hot inflation data, pushing major indices up by approximately 1%.

The Dow Jones Industrial Average surged 0.98%, while the Nasdaq climbed 0.96%. The S&P 500 advanced 0.86%, adding around 509 points to its value.

The August Consumer Price Index (CPI) revealed a monthly increase of 0.4% and an annual increase of 3.4%, both figures slightly higher than July's data.

Core inflation, excluding food and energy components, rose by 0.3%, exceeding the consensus forecast of 0.2%. This stronger-than-anticipated core inflation figure prompted market participants to increase their expectations for a Federal Reserve rate hike.