Traders work on the floor of the New York Stock Exchange on Jan. 10, 2025 in New York City.
NYSE
Stocks surged on Wednesday after the latest consumer price index report showed core inflation unexpectedly slowed in December and major U.S. banks kicked off quarterly earnings reporting season with blowout results.
The Dow Jones Industrial Average traded 640 points higher, or 1.5%. The S&P 500 climbed 1.4%, and the Nasdaq Composite rallied 1.5%.
December’s consumer price index showed that core inflation, which excludes food and energy, rose 3.2%, the Bureau of Labor Statistics reported Wednesday. This was a notch down from the previous month and lower than the 3.3% estimated by economists surveyed by Dow Jones. Meanwhile, the 0.4% month-over-month uptick in headline inflation came in slightly above the 0.3% forecast by economists. On a 12-month basis, headline inflation increased 2.9% which was in line with forecasts.
“Wednesday’s softer-than-expected CPI print offers some relief, especially after last Friday’s hot employment numbers, that the Fed may be able to still cut interest rates in 2025,” said Skyler Weinand, chief investment officer at Regan Capital.
The 10-year Treasury yield sharply dropped on the back of the CPI report and was last down 10 basis points at 4.686%. Growth stocks such as Tesla and Nvidia advanced 3.2% and 1%, respectively, as Treasury yields dove.
Fourth-quarter earnings reporting season got off to a positive start Wednesday, with big banks managing to broadly top the Street’s expectations. JPMorgan Chase shares rose slightly after the bank reported EPS of $4.81 for the last period, much higher than the $4.11 estimate from analysts polled by LSEG. Revenue also topped expectations. Fixed income trading and investment banking drove the results.
Shares of Goldman Sachs added 4% after the bank posted a top- and bottom-line beat in the previous quarter. The investment bank’s earnings of $11.95 per share on $13.87 billion topped forecasts calling for $8.22 EPS and revenues of $12.39 billion, per LSEG.
Wells Fargo shares climbed 4.6% after the bank said net interest income would be 1% to 3% higher in 2025. Meanwhile, Citigroup also popped more than 4% after beating fourth-quarter estimates.