Stocks have moved sharply higher during trading on Wednesday, with the major averages all showing strong moves to the upside after ending the previous session narrowly mixed. The tech-heavy Nasdaq is posting a standout gain after ending Tuesday’s trading at a nearly two-month closing low.
Currently, the major averages are off their highs of the session but still firmly positive. The Nasdaq is up 408.33 points or 2.1 percent at 19,452.73, the S&P 500 is up 90.43 points or 1.6 percent at 5,933.34 and the Dow is up 592.38 points or 1.4 percent at 43,110.66.
The rally on Wall Street reflects a positive reaction to the Labor Department’s closely watched report on consumer price inflation in the month of December.
While the report showed consumer prices rose by slightly more than expected in December, the annual rate of core consumer price growth unexpectedly slowed.
The Labor Department said its consumer price index climbed by 0.4 percent in December after rising by 0.3 percent in November. Economists had expected consumer prices to rise by another 0.3 percent.
The report also said the annual rate of growth by consumer prices accelerated to 2.9 percent in December from 2.7 percent in November, in line with economist estimates.
Meanwhile, the Labor Department said core consumer prices, which exclude food and energy prices, edged up by 0.2 percent in December after increasing by 0.3 percent for four straight months. The uptick matched expectations.
The annual rate of growth by core consumer prices slowed to 3.2 percent in December from 3.3 percent in November, while economists had expected yearly growth to remain unchanged.
“Core Inflation isn’t accelerating and that’s the story,” said Jamie Cox, Managing Partner for Harris Financial Group. “The market may have had its hair on fire about inflation running away again, but the data do not support that conclusion.”
Positive sentiment has also been generated in reaction to upbeat earnings news from financial giants JPMorgan Chase (JPM), Goldman Sachs (GS) and Citigroup (C).
Sector News
Financial stocks have moved sharply higher in reaction to the upbeat earnings news, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index spiking by 3.3 percent and 2.6 percent, respectively.
Substantial strength is also visible among interest rate-sensitive housing stocks, resulting in a 2.6 percent surge by the Philadelphia Housing Sector Index.
Computer hardware, semiconductor and software stocks are also seeing considerable strength, contributing to the strong upward move by the tech-heavy Nasdaq.
Interest rate-sensitive utilities and telecom stocks have also shown significant moves to the upside, moving higher along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index edged down by 0.1 percent, while Hong Kong’s Hang Seng Index rose by 0.3 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index is up by 1.6 percent, the U.K.’s FTSE 100 Index is up by 1.1 percent and the French CAC 40 Index is up by 1.0 percent.
In the bond market, treasuries have moved sharply higher in reaction to the consumer price inflation data. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 13.5 basis points at 4.653 percent.
Business News
U.S. Stocks Rally Amid Positive Reaction To Inflation Data, Bank Earnings
2025-01-15 15:56:07
