Thursday's big market rally on cooler inflation does not mean we're out of the woods yet

Traders work on the New York Stock Exchange (NYSE) at Wall Street in New York City.
Angela Weiss | Afp | Getty Images

Stocks surged Thursday after a weaker-than-expected consumer price index increase sent bond yields and the U.S. dollar lower on the hope that the Federal Reserve can be less aggressive in their fight against inflation. The Dow Jones Industrial Average was up more than 2.5%, the S&P 500 was up more than 4% and the Nasdaq was up more than 5.5%.

While encouraged by the strong rally, reclaiming Wednesday's sharp stock losses and then some, we're reluctant to fully embrace this move as a turning point in the brutal year for investors on worries it could be another short-lived bear market bounce.