Investing.com – U.S. stocks rose on Wednesday as a key measure of inflation unexpectedly cooled in December, easing concerns that a rebound in price pressures could force the Federal Reserve into a prolonged pause on further cuts to inflation. guys.
At 12:54 pm ET (17:54 GMT), the index gained 639 points, or 1.5%, the index added 1.6% and was up 2.1%.
December core CPI cools unexpectedly
Confidence was boosted on Wednesday after data showed the headline consumer price index rose 0.4% month-on-month in December, slightly faster than the previous month's 0.3% pace. Compared to a year ago, the CPI gained 2.9%, up from 2.7% in November.
However, the surprise came with the figure called “”, which excludes volatile components such as fuel and food. This rose 0.2% month-on-month and 3.2% year-on-year, missing expectations of 0.3% and 3.3%, respectively.
Still, some on Wall Street continue to see risks to inflation and reiterate expectations of just one cut this year.
“Our basis remains only for a further 25 basis point cut by the FOMC, with the most likely timing being March or May. Risks remain skewed towards a later date,” Macquarie said in a note.
Ahead of the report, concerns revolved around persistent inflation, particularly after last week's blockbuster jobs data. President-elect Donald Trump's plans to impose strict tariffs on allies and adversaries alike have also fueled concerns about price pressures.
Markets are positioning for a much slower pace of interest rate cuts in 2025, with the Federal Reserve forecasting just two rate cuts, a trend that could bode poorly for risk-driven assets.
Before this publication, there were fears that the Fed could be forced, due to persistent inflation, to raise rates this year.
Big banks impress with their quarterly results
In the corporate sector, several major banks impressed with their latest quarterly results on Wednesday, offering a boost to the waning post-election stock market rally.
Shares of JPMorgan Chase (NYSE rose 2% after the investment banking giant posted a record annual profit as its dealmakers and traders reaped a windfall from the markets' recovery in the fourth quarter.
Goldman Sachs (NYSE:) shares soared 5% after the investment bank's earnings more than doubled in the fourth quarter, boosted by strong reading results.
Wells Fargo (NYSE:) shares gained more than 6% after the lender reported better-than-expected fourth-quarter results, driven by higher investment banking earnings.
BlackRock Inc (NYSE , meanwhile, rose 5% after reporting a beat on both top and bottom lines as its assets hit a record high in the fourth quarter.
Beacon roof jumps after QXO makes takeover bid
Beacon Roofing Supply Inc (NASDAQ:) rose 9% after the building products distributor said QXO had reached an $11 billion deal to buy the company.
(Ambar Warrick contributed to this article.)
!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=();t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)(0);s.parentNode.insertBefore(t,s)}(window, document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);
