A significant rise in US stocks thanks to inflation data and bank profits

US stocks rose at the beginning of trading on Wednesday after the boost that stock markets received from US economic data, and the announcement of a number of major US financial institutions achieving strong profits during the fourth quarter of last year.
The broader S&P 500 index of US stocks rose by 1.5%, while the standard Dow Jones Industrial Average rose by 652 points, or 1.5%, by 9:35 AM EST, and the Nasdaq Composite Index rose by 1.7%.
At the same time, yields on the bond market declined sharply after US Department of Labor data released today showed a slowdown in inflation for prices of basic consumer goods.

High inflation rate

The data also showed that the general inflation rate rose to 2.9% in December compared to 2.7% in November, but this data is more encouraging than it appears on the surface.
After excluding food and energy prices, which may fluctuate sharply from month to month, the core inflation rate, which excludes these goods, fell to 3.2% in December, while economists had expected it to remain at 3.3% for the fourth month in a row.
When reviewing monetary policy, the US Federal Reserve focuses on the core inflation rate more than the general inflation rate.

Banking sector stocks led the rise in US stocks at the beginning of today’s trading after a number of them announced stronger profits than expectations.
Wells Fargo Bank’s stock price rose by 4.2%, while Citigroup’s stock rose by 4.3% and Goldman Sachs’ stock rose by 4.6%, for example.
JPMorgan Chase’s net profits also increased by 50% to more than $14 billion during the last quarter of 2024, as the bank’s profits and revenues easily exceeded Wall Street’s expectations.