US stocks surged on Wednesday, ending a three-day losing streak, as inflation data came in cooler-than-expected. The US consumer price index rose 0.4% seasonally adjusted in December, with the 12-month inflation rate at 2.9%. Core inflation, excluding food and energy prices, increased 0.2% monthly and 3.2% yearly.
The news boosted markets, with the S&P 500 jumping 1.83%, the Dow Jones Industrial Average climbing 1.65%, and the Nasdaq Composite rising 2.45%. Treasury yields also fell sharply, moderating interest rate expectations.
Banks saw significant gains in earnings reports, with JPMorgan Chase’s profit increasing 50% to $14 billion and Goldman Sachs’ profits roughly doubling to $4.11 billion. Analysts are cautiously optimistic about upcoming earnings reports, but volatility remains due to changes in the US administration and policies.
Overall, a combination of lower-than-expected inflation and strong bank earnings has given investors a reason to cheer, although market conditions can shift quickly.
Source: https://www.cnbc.com/2025/01/16/cnbc-daily-open-markets-celebrate-cool-cpi-and-bank-earnings.html