Wall Street made its largest rebound in years Thursday, as stocks recovered from heavy morning losses sparked by worse-than-expected inflation data.

The S&P 500 gained 2.6%, a surprising recovery after falling as much as 2.4% and reaching its lowest level in nearly two years. From low to high, the Dow Jones Industrial Average fluctuated by more than 1,500 points. The recoveries were the most significant for each indicator since March 2020.

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Besides stocks, prices also initially tumbled for bonds and cryptocurrencies in a knee-jerk reaction to a disappointing report from the U.S. government, which showed inflation is spreading more widely across the economy. One component that’s closely followed by policymakers and investors accelerated to its hottest level in 40 years.

That forced investors to brace for continued, big hikes to interest rates by the Federal Reserve to get inflation under control, and the potential recession those moves could create. The Dow Jones Industrial Average fell as many as 549 points shortly after the report’s release, and the Nasdaq was down as much as 3.2%.

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The slump didn’t last. Stocks shot up, driving the Dow up 827.87 points, or 2.8%, at 30,038.72. The Nasdaq climbed 232.05 points, or 2.2%, at 10,649.15. The benchmark S&P 500, which was briefly up 3%, rose 92.88 points to 3,669.91. The gains ended a six-day losing streak for the S&P 500 and Nasdaq.

Smaller company stocks also rallied after an initial slide. The Russell 2000 rose 40.65 points, or 2.4%, to close at 1,728.41.

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Stocks in Europe also flipped from losses caused by the U.S. inflation data, while Treasury yields pulled back a little from their initial surge. The value of the U.S. dollar against other currencies sank after initially jumping.

The overall Consumer Price Index, also called CPI, was 8.2% higher in September than a year earlier, versus August’s 8.3% inflation.

Also Read| US CPI Inflation eased to 8.2% in September, core index hits new four-decade high

Treasury yields pulled back a bit from their initial, early-morning leaps, lessening a bit of the pressure on stocks.

The yield on the 10-year Treasury, which helps set rates for mortgages and many other loans, rose to 3.96% from 3.90% late Wednesday. Earlier in the day, it topped 4%.

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The two-year yield, which moves more on expectations for Fed action, rose to 4.48% from 4.29%. It crossed above 4.50% earlier in the morning.