U.S. stocks ripped higher Wednesday following a shot of adrenaline from an encouraging update on U.S. inflation. Strong profit reports from Wells Fargo and other big U.S. banks also helped launch indexes to their best day in two months.

Treasury yields also eased in the bond market following the update on how much more US households had to pay in December for eggs, gasoline, housing and other costs of living. The report said overall inflation accelerated to 2.9 per cent from 2.7 per cent in November.

Stocks surged as traders responded strongly to the first major inflation report of the year and the kickoff of fourth-quarter earnings season, though one strategist warns the market’s recent fickle nature should keep investors on their toes.

The Dow surged 600 points after the latest core inflation report indicated a slowdown, bolstered further by strong banking earnings.