Stock Market Today: Indices Hold onto Gains after CPI Data

Last Updated 4:05 PM EST

Stock indices finished today’s trading session in the green. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 gained 0.31%, 0.74%, and 1.09%, respectively.

The consumer staples sector was the session’s laggard, as it lost 0.16%. Conversely, the real estate sector was the session’s leader, with a gain of 2.18%.

Furthermore, the U.S. 10-Year Treasury yield decreased to 3.51%, a decrease of more than 9 basis points. Similarly, the Two-Year Treasury yield also decreased, as it hovers around 4.23%. This brings the spread between them to -72 basis points.

Compared to yesterday, the market is pricing in a higher chance of a lower Fed Funds rate for June 2023. In fact, the market’s expectations for a rate in the range of 5% to 5.25% decreased to 28.9% compared to yesterday’s expectations of 40.7%.

In addition, the market is now also assigning a 42.8% probability to a range of 4.75% to 5%. For reference, investors had assigned a 31.4% chance yesterday.

Market Rally Loses Steam as CPI Enthusiasm Fades

Last Updated at 2:58PM EST

Stocks are in the green heading into the final hour of today’s trading session. As of 2:58 p.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.2%, 0.7%, and 1%, respectively.

In addition, WTI crude oil is higher today, as it hovers around the mid-$75 per barrel range. The commodity’s overall downtrend has caused prices at the pump to decline when compared to last week.

Indeed, the national average for regular gas was last $3.245 per gallon, down from last week’s reading of $3.38. This is significantly lower than the all-time high of $5.016 per gallon on June 14.

The highest prices can be found in Hawaii, where prices are substantially higher than the national average, at $5.143 per gallon. On the other hand, Texas is the state with the lowest gas prices, at $2.687 per gallon.

It’ll be interesting to see if this downward trend will continue going forward as the Federal Reserve looks to raise interest rates to fight inflation while oil producers lower production in order to maintain the price.

Last updated 1:00PM EST

The downward momentum continues as the Dow Jones Industrial Average has given up all its gains to turn negative. As of 1:00 p.m. EST, the Dow Jones Industrial Average is down 0.1%. Meanwhile, the S&P 500 and the Nasdaq 100 are still positive, as they are up 0.4% and 0.7%, respectively.

Last updated 11:53AM EST

Stocks are in the green near the halfway point of today’s trading. However, the market’s initial optimism has faded, as the major indices are off their highs and trending lower. As of 11:52 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are up 0.2%, 0.8%, and 1.3%, respectively.

Markets Rally at Open as Investors Cheer Cooled Down Inflation

Last updated 9:44AM EST

After the latest CPI data indicating that inflation had cooled down, markets rallied at open on Tuesday.

The Dow Jones Industrial Average (DJIA) gained 1.7%, while the S&P 500 (SPX) climbed 2.5%, as of 9:44 a.m. EST, Tuesday. Meanwhile, the Nasdaq 100 (NDX) advanced 3.6%.

Last updated 8:42AM EST

The latest Consumer Price Inflation (CPI) data from the U.S. Bureau of Labor Statistics indicated that inflation cooled down to 0.1% for the month of November on a seasonally adjusted basis, lesser than estimates of 0.3% after a 0.4% increase in October. Overall, the CPI index for all items was up 7.1% in the past 12 months versus expectations of 7.3%.

Following this news, futures on the Dow Jones Industrial Average (DJIA) gained 2%, while those on the S&P 500 (SPX) climbed 2.7%, as of 8:42 a.m. EST, Tuesday. Meanwhile, the Nasdaq 100 (NDX) futures advanced 3.7%.

First published 7:16AM EST

Stock futures were up early Tuesday as the Federal Reserve kickstarts the first day of the FOMC meeting. Additionally, investors are also getting prepared for November’s Consumer Price Index (CPI) report.

Futures on the Dow Jones Industrial Average (DJIA) gained 0.53%, while those on the S&P 500 (SPX) climbed 0.43%, as of 7.00 a.m. EST, Tuesday. Meanwhile, the Nasdaq 100 (NDX) futures advanced 0.39%.

Investors and experts are looking for signs of cooling inflation. Economists surveyed by Dow Jones are looking at an annual price rise of 7.3% on average in November. If CPI indeed comes in at or below 7.3%, the market might see a spike, as this would mean two consecutive months of deflation (after October’s reading of 7.7%). Investors would be counting on the fact that a U.S. recession can possibly be avoided with a slower pace of policy tightening.

Tuesday’s CPI report will play a pivotal role in influencing the Federal Reserve’s rate hiking decision for December. If, on the other hand, the inflation reading comes higher than expected, this could mean more aggressive interest rate hikes this month and onwards.

However, traders are largely expecting a 50 basis point appraisal in interest rates. In addition, they will also keep an eye on Fed Chair Jerome Powell’s updated outlook and speech on other economic developments on Thursday. Market participants will also keep a watch on any signs of a pause or pivot by the Fed in the sooner future.

Having said that, it should be borne in mind that the macroeconomic backdrop has not changed much, and chances of a pause or a pivot are very unlikely. However, if the central bank does at all hint at a pause over the next month or two, it will most likely be only to gauge the effects of previous rate hikes on the economy better. An interest rate hike takes two to three months to show its effect on the economy. Thus, a pause in the next cycle would not necessarily mean an end to the Fed’s hawkishness.

The market closed a solid session on Monday, with the S&P 500, the Dow, and the Nasdaq 100 ending 1.43%, 1.58%, and 1.24% higher. Gains in the S&P 500 were led by a rally in energy stocks, which climbed as oil prices gained.

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