US stocks have shown resilience on Thursday, recovering from earlier losses to end the session mostly flat. The recovery came after a fresh reading on December inflation, which was slightly hotter than economists had expected. This raised new questions about the Federal Reserve’s path on interest rates.
The S&P 500, which had been down as much as 0.8% during the session, closed just under the flatline. The Dow Jones Industrial Average and the Nasdaq Composite hovered slightly above breakeven.
Interest rate sensitive sectors lagged the most, with real estate and utility stocks ending the session lower.
Investors had been anxiously awaiting the US consumer inflation reading for December. The reading showed a slightly bigger jump than expected, with prices ticking up 0.3% month over month and 3.4% year over year. On a “core” basis, which excludes the volatile food and energy categories, inflation rose 3.9% over the past year.
The print was crucial for traders who have been increasingly pricing in the odds of a “soft landing” — where inflation retreats to 2% without an economic downturn — since the last CPI report.
Meanwhile, US spot bitcoin ETFs began trading on Thursday after the SEC gave regulatory approval on Wednesday. Bitcoin held above $46,000 per token, while rival ether jumped amid bets that the second-biggest token is next to get the ETF green light.
In other news, Citigroup announced that it will take more than $3 billion in one-time reserves and expenses in its quarterly financial update on Friday. The fourth quarter earnings season is crucial for stocks, given their dismal performance this year so far.