Market Update: Stocks Rise as Inflation Data Meets Expectations
The US stock market experienced a boost on Wednesday as investors digested the latest consumer inflation data, which met economist forecasts. The Dow Jones Industrial Average jumped around 0.4%, recovering from a steep slide the previous day. The S&P 500 and Nasdaq Composite also rose, up about 0.3% and 0.2%, respectively.
Inflation Remains Steady
The Consumer Price Index (CPI) increased 2.6% year over year and 0.2% on a month-over-month basis, matching expectations. Core inflation, which excludes food and energy prices, rose 3.3% year over year and 0.3% month over month, also meeting forecasts. These figures suggest that the Federal Reserve is on track to cut interest rates again in December, with 80% of traders expecting a rate cut, according to the CME FedWatch tool.
Bitcoin Surges to New High
Meanwhile, bitcoin prices continued their upward trend, climbing roughly 5% to trade above $92,000 a coin. The cryptocurrency has been gaining momentum since the US presidential election, with investors hoping that President-elect Donald Trump will follow through on his pro-crypto campaign promises.
Disney Earnings Ahead
On Thursday, Disney is set to report its fiscal fourth-quarter earnings, with investors focusing on the company’s streaming and parks businesses. This will be the first time investors will have a chance to digest year-over-year trends of Disney’s three core business units: Disney Entertainment, Experiences, and Sports.
Other Market Movers
Tesla shares erased earlier gains after initially climbing on the announcement that CEO Elon Musk will head up a new Department of Government Efficiency. Rivian stock jumped by double digits after Volkswagen raised its investment in the rival electric carmaker to $5.8 billion. Spirit Airlines plummeted as much as 64% as it explores a deal with creditors to restructure its debt amid a reported threat of bankruptcy. Cava shares surged 17% after the fast-casual Mediterranean chain reported third-quarter earnings that beat expectations.
Food Inflation Remains Sticky
Food inflation remained steady in October, with grocery prices climbing 1.1% compared to a year ago and 0.1% compared to September. The cost of dining out continues to drive prices higher, with restaurant meals up 3.8%. Egg prices, which are historically volatile, contributed to the stubborn grocery inflation, while oranges, affected by drought and citrus greening, also boosted overall food prices.
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