Stocks Surge as Investors Await Inflation Data and Earnings
Traders at the New York Stock Exchange were in for a pleasant surprise on Wednesday as stocks closed higher, with investors eagerly awaiting the release of fresh U.S. inflation data and earnings reports.
The S&P 500 gained 0.57% to end at 4,783.45, while the Dow Jones Industrial Average added 170.57 points, or 0.45%, to close at 37,695.73. The Nasdaq Composite also advanced 0.75% to settle at 14,969.65.
Some of the big winners of the day were Intuitive Surgical and Lennar, which pulled the broad market index higher, gaining 10.3% and 3.5% respectively. Intuitive Surgical increased its procedure growth outlook for fiscal year 2024, while Lennar had also announced an increase to its annual dividend.
While market activity appeared to be fairly muted, Phillip Colmar, managing partner and global strategist at MRB Partners, warned that the calm could be the “calm before the realization.” He noted that market expectations have been fairly quiet given the Federal Reserve’s planned interest rate cuts that have been priced in by year-end.
Investors are eagerly awaiting the latest consumer price index (CPI) report slated for release on Thursday. Economists polled by Dow Jones expect CPI to have risen by 3.2% year over year in December. The producer price index is also due on Friday.
The reports will be closely watched by investors for clues on when the Federal Reserve may start cutting rates. Some of those expectations have been dialed back in recent days, although the odds hover at around 64%, according to CME Group FedWatch tool.
“The market is seeing a tug of war against those who see slower, but still resilient, economic growth and those who see a more difficult economic pullback,” said LPL Financial chief global strategist Quincy Krosby.
Earnings will heat up on Friday with results from major financial heavyweights including JPMorgan Chase and Bank of America, along with UnitedHealth and Delta Air Lines.
Stocks are coming off a mixed session, with the S&P 500 and Dow closing lower on Tuesday, while the Nasdaq posted a slight gain. As investors continue to monitor incoming economic data and corporate earnings, the stock market remains poised for potential volatility in the coming months.