A surge in US stocks was seen, and a drop in the dollar was reported after inflation was shown to have cooled.

On Friday, a significant rebound was observed in U.S. stocks, nearly halving the losses from what had been one of the market’s toughest weeks of the year.

It was reported that the S&P 500 rose by 1.4%, marking its best day since Election Day and reducing the weekly loss to 1.7%. The Dow Jones Industrial Average was increased by 602 points (1.4%), and the Nasdaq Composite was also noted to have rallied by 1.4%. Tech giants, including Nvidia, were credited with leading this recovery following inflation data that was slightly better than expected.

Meanwhile, the U.S. dollar was noted to have neared a two-year peak, supported by a hawkish U.S. rate outlook. A broader rally in the dollar led to milestone lows for currencies like the South Korean won and the Australian and New Zealand dollars. Central banks, including those in Brazil and Indonesia, were reported to have taken measures to defend their currencies. A dovish stance by the Bank of England was associated with a slip in the pound to a one-month low.

These movements were seen as reflective of investor reactions to recent economic data and central bank policies, illustrating the complex interplay between inflation trends, interest rate expectations, and global economic conditions.