US inflation data revives the hopes of Wall Street stock investors
Wall Street indices
The Dow Jones Industrial Average rose 656 points, or 1.6%, while the S&P 500 rose 1.6% and the Nasdaq Composite rose 2.2%.
US Consumer Price Index
The Consumer Price Index for December showed that core inflation, which excludes food and energy, rose 3.2%, the Bureau of Labor Statistics reported on Wednesday, slightly lower than the previous month and below the 3.3% expected by economists polled by Dow Jones.
Headline inflation rose by 2.9% year-on-year, in line with expectations.
The stock market breathes a sigh of relief
John Kirschner, portfolio manager at Janus Henderson Investors, said: “The market is breathing a sigh of relief after successive inflation indicators, the Producer Price Index and the Consumer Price Index, came in slightly below expectations. Perhaps most importantly, the CPI number excludes any additional increases in interest rates, which is “Some market participants are starting to value it prematurely.”
Treasuries decline amid rising stocks
The 10-year US Treasury yield fell sharply on the back of the CPI report and was recently down 14 basis points at 4.651%. Shares such as Tesla and NVIDIA rose by about 5% and 2%, respectively.
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Goldman Sachs and major bank stocks
Fourth-quarter earnings reports started on a positive note on Wednesday as major banks generally managed to beat Street expectations.
JPMorgan Chase shares rose slightly after it announced superior earnings per share and revenues, which was driven by strong results for fixed income trading and investment banking.
Goldman Sachs shares rose by more than 6% after the bank recorded superior profits and results in the previous quarter. Wells Fargo shares also rose by 5.3% after the bank said that net interest income will rise by between 1% and 3%. In 2025.
Citigroup Bank shares also rose by 6% after exceeding fourth-quarter estimates.
What does higher bank profits mean?
Regarding this, Larry Tintarelli, chief technical strategist at Blue Sheep Daily Trend Report, said: “Today we started the earnings season well, and bank profits are considered very important because the financial sector is closely linked to the general economy, so these major banks achieving upward numbers today is a good thing.” “I think this bodes well.”
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The dollar declines after the release of inflation data
The US dollar fell on Wednesday after the December CPI report showed core inflation rose less than expected.
The dollar index fell 0.4% to 108.7 points, while the dollar fell against the Japanese yen by 1% to 156.41 yen, by 0.1% against the euro, and by 0.3% against the South Korean won to 1455.19.
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