Stocks End Thursday Near Flat Line After Inflation Data Release
Traders at the New York Stock Exchange saw a mixed day on Thursday as stocks ended the day near the flat line following the release of a fresh round of inflation data which showed an uptick in consumer prices for the month of December.
The Nasdaq Composite closed at 14,970.19, with the Dow Jones Industrial Average eking out a gain of 15.29 points, or 0.04%, to close at 37,711.02. The S&P 500 edged lower by 0.07% to end at 4,780.24.
The consumer price index report for December showed a slightly higher-than-expected 0.3% increase in consumer prices for the month, pushing the annual rate to 3.4%. This was above the 0.2% rise predicted by economists, and the 3.2% year-over-year increase they had anticipated.
Core CPI, which excludes volatile food and energy prices, came in line with expectations, suggesting persistent yet easing inflation pressures. This data suggests that future interest rate cuts may be slower to come.
The release of the inflation data saw initial rises in yields, with the rate on the 10-year note reaching a high of 4.068% before slipping to about 3.98%.
According to Jon Maier, chief investment officer at Global X, “This uptick in CPI is a critical reminder of the unpredictable nature of economic recovery and the murkiness of the macro-economic data. Markets may need to brace for potential volatility, as the Fed could maintain or potentially intensify its restrictive monetary policy stance in response to these inflationary pressures.”
The market action on Thursday was also influenced by tempered expectations surrounding the Federal Reserve’s rate cut timeline as well as earnings jitters. The week kickstarted the fourth-quarter earnings season, with banking giants Bank of America, Wells Fargo, and JPMorgan Chase set to report results on Friday.
“Earnings are adding to investor agita,” said CFRA chief investment strategist Sam Stovall. “We are in the pre-earnings period where there is a bit of nervousness because on December 31, earnings were expected to be up 2.1% in the final quarter and are now expected to be up 1.7%.”
Elsewhere in Thursday’s market, Bitcoin exchange-traded funds rose on their first day of trading as crypto prices also edged up. Bitcoin briefly hit the $49,000 mark earlier Thursday before falling to above $46,000. The moves followed approved rule changes from the U.S. Securities and Exchange Commission which opened the door for bitcoin exchange-traded funds and expanded investors’ access to the flagship crypto.
The day’s mixed market action comes after all three major indexes rose on Wednesday.