Dow Jones ignored rising CPI data increased to 8.2 YoY, exceeding the street’s expectations.

Today’s U.S. CPI data for September issued by the government raises another concern about the Fed raising rates aggressively at its upcoming policy meeting. In contrast to the 8.1 street estimate the CPI jumps to 8.2 on a YoY basis, month-on-month basis it rose to 0.4% contributed by the household items. And for core inflation excluding foods and energy, increased by 0.6 percent in September, exceeding experts’ estimates of 0.4 percent.

Falling crude oil prices and three straight meetings of rate increases by 0.75 percent by the Fed were insufficient to make a dent in inflations. The Fed’s next policy meetings will be conducted in November and December, and the market is now preparing for shocks of additional rate increases by the Fed.

The U.S. benchmark indices Dow Jones, S&P 500, and Nasdaq were showing a sharp reaction of 2% or more fall earlier this morning to the souring inflation data. Traders and investors made a panic exit as soon as the data was released by the government. Bears successfully restrained the bullish group of buyers, and the three major U.S. indices hit fresh 52-week lows. Today’s new 52-week lows made by Dow Jones, S&P 500, and Nasdaq were 28,660.94, 3,490.00, and 10,088.83, respectively. At the day’s bottom, the Dow Jones, S&P 500, and Nasdaq were all down between 2% and 3%, Nasdaq was the top loser led by the technology basket.

As the day progresses street participants realized a value buying opportunity at its bottom. Most of the shocks from the Fed were already priced in by time and value correction when U.S. indices tumbled to new 52-week lows. As a result, aggressive short covering and fresh buying reversed all the losses of the morning session. The three benchmark indices of U.S., Dow Jones, S&P 500 and Nasdaq made a dramatic rise of around 2-3% to yesterday’s closing prices led by financials, materials, and energy packs. The U.S. market led by Dow Jones closed the day at 30,038.72 a major psychological level for all bulls. Today’s movement was probably the biggest intraday swing of around 5% from low to high in Dow Jones in recent times.

The important thing to remember is that, after falling more than 20% from its top, Nasdaq was already trading in the bear market territory. On a closing basis, only Dow Jones was an exception and avoided the bear market. Now all eyes will be on ongoing sessions to see if today’s dramatic rally signifies the end of the bear cycle or just an intermittent comeback of the bear market.

While European markets, led by the Dax, were up by 1–1.5% at closing, all Asian futures also indicated a big recovery for tomorrow in response to the U.S. markets. The majority of the important Asian futures including India(SGX Nifty), have all increased by 1-1.5%.