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Traders work on the floor of the New York Stock Exchange on August 2, 2023.
Spencer Pratt | Getty Images News | Getty Images
Stocks closed near the flat line on Thursday after new inflation data reflected higher consumer prices in December.
of Nasdaq Composite It closed flat and settled at 14,970.19.of Dow Jones Industrial Average It rose 15.29 points (0.04%) to close at 37,711.02.of S&P500 It fell 0.07% to end at 4,780.24. In early trading, the broader market index briefly traded above its all-time high of 4,796.56.
December’s Consumer Price Index report was slightly better than expected, reflecting a 0.3% increase in consumer prices for the month, bringing the annual rate of increase to 3.4%. Economists polled by Dow Jones had expected the CPI to rise 0.2% in December, or 3.2% from a year earlier.
However, the core CPI, which excludes volatile food and energy prices, was in line with expectations, showing that inflationary pressures persist but are easing. Data released Thursday suggests future rate cuts may be slow.
“This rise in the CPI is a significant reminder of the unpredictability of economic recovery and the uncertainty of macroeconomic data,” said John Mayer, chief investment officer at Global X. “The Fed may maintain or tighten its restrictive monetary policy stance in response to these inflationary pressures.”
Yields initially rose following the CPI data, with the 10-year bond yield reaching a high of 4.068%, but have since fallen to around 3.98%.
Sam Stovall, chief investment strategist at CFRA, said Thursday’s market movement was driven in part by waning expectations around the Federal Reserve’s rate cut schedule, as well as earnings concerns.Big banks’ fourth quarter earnings season begins this week american bank, wells fargo and JP Morgan Chase They plan to report the results on Friday.
“Earnings are adding to the excitement among investors,” Stovall said. “We’re in the pre-earnings period and we’re a little nervous because as of Dec. 31, final quarter earnings were expected to increase 2.1% and are now expected to increase 1.7%.”
Sonu Varghese, global macro strategist at Carson Group, said Friday’s big bank earnings reflected generally strong consumer demand, which fuels a positive outlook for the U.S. economy and nominal GDP growth. It’s supposed to be.
Elsewhere in the market on Thursday, Bitcoin ETFs also rose on their first day of trading, with crypto prices also rising slightly. Bitcoin briefly reached the $49,000 level early Thursday, but has since fallen to above $46,000. The move follows a rule change approved Wednesday by the U.S. Securities and Exchange Commission that opens the door to Bitcoin exchange-traded funds and expands investor access to the flagship cryptocurrency.
Stocks are coming off a strong session, with all three major indexes rising on Wednesday.
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