Market Update: Stocks Mixed as Investors Weigh Inflation Data
The US stock market closed mixed on Wednesday, with investors digesting fresh consumer inflation data that met forecasts. The tech-heavy Nasdaq Composite reversed earlier gains to close down about 0.3%, while the benchmark S&P 500 finished the day just above the flatline. The Dow Jones Industrial Average moved about 0.1% higher.
Inflation Remains Steady
The Consumer Price Index (CPI) rose 2.6% year over year and 0.2% on a month-over-month basis, both meeting forecasts. Core inflation, which excludes food and energy prices, also met expectations, rising 3.3% year over year and 0.3% month over month.
Fed Rate Cut Expectations
The inflation data appears to keep the Federal Reserve on track for a December rate cut. According to the CME FedWatch tool, over 80% of traders expect a rate cut in December. Minneapolis Fed president Neel Kashkari stated that inflation data is the key focus for the central bank in the weeks ahead, and any surprise to the upside “might give us pause.”
Bitcoin Soars
Bitcoin prices continued their upward trend, briefly touching a new milestone of $93,000 before paring gains. The cryptocurrency has surged more than 30% since the election, driven by expectations of President-elect Donald Trump’s pro-crypto policies.
Earnings and Economic Data
Disney will report its fiscal fourth-quarter earnings before the bell on Thursday, with investors focusing on the company’s streaming and parks businesses. AMD announced plans to lay off 4% of its global workforce to focus on growth initiatives like artificial intelligence.
Trending Stocks
Tesla shares erased earlier gains after CEO Elon Musk was appointed to head a new Department of Government Efficiency. Rivian stock jumped after Volkswagen raised its investment in the rival electric carmaker. Spirit Airlines plummeted as much as 64% after exploring a deal with creditors to restructure its debt amid a reported threat of bankruptcy.
Food Inflation Remains Sticky
Food inflation remained elevated in October, driven by higher prices for select items like eggs and oranges. The cost of groceries climbed 1.1% compared to a year ago, with the overall food category increasing 2.1%.
Economists Weigh In
Economists warned of another potential inflation resurgence following the election of Donald Trump as the nation’s next president. Trump’s proposed policies have been viewed as potentially more inflationary due to his campaign promises of high tariffs on imported goods, tax cuts for corporations, and curbs on immigration.
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