Stock market today: Indexes rise as tame inflation report solidifies rate-cut hopes
The Wall Street subway stop
US stocks climbed on Wednesday as the latest inflation report bolstered confidence in a final interest rate cut this year.
November’s consumer price index rose 2.7% on an annual basis and 0.3% month-to-month. Though it marks a slight uptick from October’s 2.6% reading, the data aligns with Wall Street’s expectations.
Core CPI, which excludes food and energy prices, rose 3.3% year-to-year, as expected.
“The headline CPI was consistently above 3% in the beginning of the year and now it is consistently below 3%, so despite the fact that the series is a little noisy from month-to-month, we believe the Fed is likely to look through these fluctuations and continue on their easing path,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management.
Odds of a quarter-point interest rate cut next week jumped to 94.5% after Wednesday’s CPI report, according to CME FedWatch Tool. Before the data’s release, investors feared that stickier inflation could sway the Fed’s decision making at its upcoming policy meeting starting on December 17th.
“The CPI print confirms the market consensus of another 25bps rate cut from the Federal Reserve. We are still closely monitoring the strength of the labor market and potential stickiness of certain components of inflation (shelter, services) heading into 2025,” wrote Josh Hirt, Vanguard senior US economist.
Other market moves were muted in response to the data. Bond yields were nearly flat, with the 10-year Treasury yield down less than one basis point to 4.217%. The US dollar was also stable versus rival currencies, with the Dollar Index inching up to $106.53.
With inflation coming in as expected, stocks are regaining ground after two losing sessions this week. Wall Street will now watch for the latest producer price index to be released on Thursday.
Here’s where US indexes stood at the 9:30 a.m. opening bell on Wednesday:
- S&P 500: 6,065.21, up 0.5%
- Dow Jones Industrial Average: 44,348.32, up 0.10% (+43.06 points)
- Nasdaq composite: 19,911.93, up 1.14%
Here’s what else is happening:
- Microsoft shareholders on Tuesday rejected a proposal for the tech giant to possibly invest in bitcoin.
- UnitedHealthcare has led health insurers lower as markets digest CEO shooting.
- Bitcoin’s post-$100,000 price drop creates risks of a 13% correction, chart master says.
- Housing around the world is more expensive than before the 2008 peak, IMF says.
- The market’s blistering postelection rally has some ringing alarms for 2025.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil rose 1.25% to $69.45 a barrel. Brent crude, the international benchmark, gained 1.07% to $72.97 a barrel.
- Gold increased by 0.53% to $2,732.5 an ounce.
- The 10-year Treasury yield stayed essentially flat at 4.213%.
- Bitcoin climbed 2.47% to $98,765.
