Last night, the U.S. stock market witnessed a stunning reversal, with all three major indices simultaneously achieving their largest gains since the pandemic began.

The international gold price also saw a significant surge.

This morning, as Asian markets opened, the Nikkei 225 index had already risen by 2.5%.

All of this stems from an unexpected piece of good news from the United States: the pace of U.S. interest rate hikes is about to change!

01, CPI

Throughout the week, the international financial market has been patiently waiting for the United States to release the latest inflation data. As per tradition, the U.S. inflation data is announced over two days, with the CPI data being released last night.

There had been much speculation about the upcoming CPI data. Since the CPI had been declining month by month in the previous months, the final expectation was that this month's CPI might fall below 8%.

However, no one could have anticipated that the actual CPI data showed a year-on-year increase of 7.7%, which is lower than the most optimistic forecast of 7.9%. The core CPI, which excludes energy and food, rose by 6.3%, also lower than the market's expectation of 6.5%, and 0.3 percentage points lower than last month's 6.6%.

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Not only did the Federal Reserve breathe a sigh of relief, but the entire investment market also let out a collective sigh.

The continuously declining CPI data indicates that inflation has already peaked and is on a downward trend, and it is possible that the decline could accelerate. This also implies that the pace of the Federal Reserve's interest rate hikes will slow down.How the Federal Reserve raises interest rates is the most significant factor affecting the market. Once it is determined that the December rate hike will only be 50 basis points, it implies that the impact of future rate hikes on the stock market will continue to diminish.

02, Indexes

Influenced by this super positive news, the Dow Jones Industrial Average rose by 1,200 points, marking the largest increase since May 2020.

At the same time, the S&P 500 Index experienced its largest increase since April of the pandemic year, and the Nasdaq Index saw its largest increase since March of that year.

Yesterday, the Nasdaq Index made a significant comeback, surging by 7.35% in a single day.

This is because, in the previous days when the market was rising, the Nasdaq's gains were the smallest, and when the market was falling, the Nasdaq's losses were the greatest. Now that the shadow of rate hikes is gradually lifting, the positive stimulus for these growth-oriented tech stocks is the greatest.

03, Individual Stocks

Out of the 500 components of the entire S&P 500 Index, fewer than 20 stocks remained in a downtrend by the close, with the highest-gaining stock rising by nearly 18%.

Sectors such as finance, semiconductors, and consumer goods all saw widespread gains.

The gains in tech stocks were even more astonishing, with Nvidia rising by 14%, Amazon by 12%, and even large-cap giants like Apple and Microsoft rose by 8%.Qualcomm, which had a recent bombshell, rose by 9.3% last night.

Chinese concept stocks rallied collectively, with NIO surging 11.8%, Bilibili climbing 15%, Alibaba increasing by 7.6%, Tencent gaining 7.5%, and JD.com, Baidu, and Pinduoduo all seeing gains exceeding 8%.

Ultimately, the China Golden Dragon Index, which represents the trend of Chinese concept stocks, rose by 7.55%.

04, Other Markets

Currently, the probability of the Federal Reserve raising interest rates by 50 basis points in December has exceeded 80%, while the likelihood of the Federal Reserve still raising rates by 75 basis points next month has dropped to just over 20%.

Moreover, judging by this trend, future rate hikes will likely decrease, and it's not ruled out that the Federal Reserve will halt its rate hikes before the second quarter of next year. If the economy continues to deteriorate, the Federal Reserve may even cut interest rates in the fourth quarter of next year.

Influenced by such optimistic expectations, U.S. stocks may continue to rise for some time to come.

During this period, the strengthening of the U.S. dollar has been suppressing gold, but now gold has suddenly surged above $1,750, and gold has seen significant increases over three consecutive trading days.

For A-shares and Hong Kong stocks, they can finally breathe a sigh of relief as the dark cloud hovering above gradually dissipates.

Due to the continuous improvement of China's economic data in recent times, once external adverse impacts are eliminated, the bull market journey of A-shares will begin again.