Market Snapshot: Dow advances over 250 points in choppy trade as Fed officials speak on cooling inflation

by | Jan 12, 2023 | Stock Market

U.S. stocks rose in afternoon trade on Thursday, shaking off earlier losses after the December consumer-price index showed inflation continued to wane last month, but not by a wide enough margin to prompt the Federal Reserve to reconsider further interest-rate hikes. How are stocks trading
The S&P 500
was up 22 points, or 0.6%, to 3,992.

The Dow Jones Industrial Average
gained 268 points, or 0.8%, to 34,241.

The Nasdaq Composite
advanced 73 points, or 0.7%, to 11,004.

Stocks rose on Wednesday in anticipation of Thursday’s inflation report, with the Dow gaining 269 points, or 0.8%, to 33,973, according to FactSet data.

What’s driving markets U.S. stocks wavered in choppy morning trade Thursday in the aftermath of the December CPI report which largely met expectations for a reduction in inflation. Three major indexes then pushed higher around midday after St. Louis Federal Reserve Bank President James Bullard said the probability of a soft landing has increased due to “encouraging” inflation data. Data showed the annual rate of headline inflation retreated in December for the sixth month in a row, declining to 6.5% from 7.1% in November. This represents the lowest reading in more than a year and a significant improvement from the 40-year peak of 9.1% seen last summer. On a month-over-month basis, headline prices actually declined by 0.1%, as economists had expected. It marked the first such decline in more than two years. See:This key inflation gauge is still flashing warning signs for the economy However, market analysts said some traders had been hoping to see a more significant decline, after inflation came in lower than economists had expected during the prior two months. Core data rose 0.3% in December, which was in line with economists expectations. “The release is a little underwhelming. Not only are the numbers exactly in line with consensus expectations, but they don’t really clear up the 25bps vs 50bps question for the Fed’s February meeting and add nothing to the late-2023 Fed pivot debate either,” said Seema Shah, chief global strategist at Principal Asset Management. But fed-funds futures traders have further increased bets on a 25 basis point, or quarter-point, move in February, after Philadelphia Fed President Patrick Harker said quarter-point moves would likely be appropriate goin …

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