Last Updated: 4:14 PM EST
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Stock indices finished today’s trading session in the green after a cooler-than-expected inflation report. Indeed, the Nasdaq 100 (NDX), the S&P 500 (SPX), and the Dow Jones Industrial Average (DJIA) gained 2.31%, 1.83%, and 1.65%, respectively. Federal Reserve officials said that today’s data shows U.S. inflation is easing, with core Consumer Price Index (CPI) inflation dropping to 3.2% in December. They also noted that disinflation is on track, but uncertainty remains due to Trump’s upcoming economic policies.
Richmond Fed President Thomas Barkin and New York Fed President John Williams stressed the importance of upcoming fiscal decisions, such as potential tariffs and tax cuts, in shaping the economy’s future. While the Fed is expected to hold interest rates steady at 4.25%-4.50% during its late-January meeting, strong job gains and robust consumer spending could delay further rate cuts.
Separately, the Fed’s Beige Book reported slight to moderate economic growth across all 12 districts, with consumer spending rising moderately and holiday sales surpassing expectations. However, the real estate market remained pressured by high mortgage rates, while manufacturing showed a slight decline as some businesses stockpiled inventory ahead of potential tariffs.
Construction slowed due to rising material costs and financing issues, though commercial real estate sales edged higher. In addition, financial services saw modest lending growth, while some concerns were raised about delinquencies among small businesses and lower-income households. The report also indicated modest price increases, partly driven by the avian flu’s impact on egg supplies. Furthermore, employment ticked up in half of the districts, and optimism about 2025 remains despite concerns about immigration and tariff policies.
First Published: 3:35 AM EST
U.S. stock futures were trading near the flatline on Wednesday morning as investors awaited the release of the December Consumer Price Index (CPI) report. This key inflation report is expected to significantly influence the Federal Reserve’s future monetary policy decisions. Futures on the Nasdaq 100 (NDX), the Dow Jones Industrial Average (DJIA), and the S&P 500 (SPX) were up 0.06%, 0.04%, and 0.03%, respectively, at 2:58 a.m. EST, January 15.
The previous session saw a mixed performance. The Dow Jones and the S&P 500 gained 0.52% and 0.1%, respectively. Meanwhile, the Nasdaq Composite declined by 0.2% due to a pullback in technology stocks. It must be noted that Tuesday’s trading was influenced by a softer-than-expected Producer Price Index (PPI) report, which eased concerns about inflation and supported a slight decline in Treasury yields.
However, the focus now shifts to the December Consumer Price Index (CPI) report, a key indicator of inflation. This data will provide crucial insights into the central bank’s ongoing battle against inflation. Currently, economists anticipate a 0.3% month-over-month increase in both headline and core CPI.
Furthermore, major financial institutions such as BlackRock (BLK), JPMorgan Chase (JPM), Citigroup (C), Goldman Sachs (GS), and Wells Fargo (WFC) are set to report their fourth-quarter results today. These earnings reports will provide valuable insights into the health of the financial sector.
Meanwhile, the U.S. 10-year treasury yield was down, floating near 4.764%. Simultaneously, WTI crude oil futures are trending higher, hovering near $78.15 per barrel as of the last check.
Elsewhere, European indices opened higher on Wednesday as traders awaited U.S. inflation data to guide the central bank’s interest rate decisions.
Asia-Pacific Markets Traded Mixed on Wednesday
Asia-Pacific indices were mixed today as investors looked ahead to key U.S. inflation data that could influence the pace of interest rate cuts by the U.S. Fed.
At the same time, Hong Kong’s Hang Seng Index was up 0.24%. However, Japan’s Topix index gained 0.31%, while the Nikkei index fell 0.08%. Also, China’s Shanghai Composite and Shenzhen Component indices declined 0.43% and 1.03%, respectively.
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