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Friday, November 22

US stocks slide as inflation jumps more than expected

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By on Finance

US stocks slipped on Thursday morning despite a fresh reading on December inflation that came in slightly hotter than economists had expected, raising new questions about the Federal Reserve’s path on interest rates.

The S&P 500 (^GSPC) fell about 0.6% after the benchmark ended Wednesday at its highest close since January 2022, just short of notching a new record. The Dow Jones Industrial Average (^DJI) and Nasdaq (^IXIC) slid 0.6%.

Stocks have struggled this week as investors counted down to the US consumer inflation reading for December. That reading showed a slightly bigger jump than expected, as prices ticked up 0.3% month over month and 3.4% year over year. On a “core” basis, which excludes the volatile food and energy categories, inflation rose 3.9% over the past year.

The print was seen as critical for traders who have been increasingly pricing in the odds of a “soft landing” — where inflation retreats to 2% without an economic downturn — since the last CPI report.

Meanwhile, crypto stocks got a boost after the SEC gave regulatory approval for US spot bitcoin ETFs to begin trading on Thursday, seen as a game-changer for the sector. Shares in exchange Coinbase (COIN) and miner Marathon Digital (MARA) were among those moving higher in premarket trading.

Bitcoin (BTC-USD) climbed above $47,000 to trade at its highest levels since March 2022, while rival ether (ETH-USD) jumped amid bets the second-biggest token is next to get the ETF green light.

Ahead of its quarterly financial update on Friday, Citigroup (C) said it will take more than $3 billion in one-time reserves and expenses in the results. The fourth-quarter earnings season is crucial for stocks, given their dismal performance this year so far.

Live3 updates

  • Hotter than expected inflation not moving Fed rate cut bets

    December’s inflation report came in slightly hotter than Wall Street expected, but it’s not moving investor bets that the Fed’s first interest rate cut could come in March.

    As of early Thursday morning, markets priced in a roughly 67% chance that the Fed cuts interest rates in March, per the CME FedWatch Tool, largely unchanged from the odds a day prior.

    “I don’t think it’s enough to delay cuts,” Bank of America US economist Stephen Juneau told Yahoo Finance Live. “We’re looking for a march cut to kind of kick off the cutting cycle. This kind of keeps the door open. it definitely doesn’t slam the door shut.”

  • Stocks gain despite hotter than expected inflation print

    US stocks gained on Thursday morning despite a fresh reading on December inflation that came in slightly hotter than economists had expected, raising new questions about the Federal Reserve’s path on interest rates.

    The S&P 500 (^GSPC) added about 0.2% after the benchmark ended Wednesday at its highest close since January 2022, just short of notching a new record. The Dow Jones Industrial Average (^DJI) added 0.1%, while the tech-heavy Nasdaq led the way, gaining 0.3%.

  • Inflation ticks higher than expected in December

    Thursday’s highly anticipated inflation report showed that consumer prices increased slightly more than expected in November.

    A quick look at the numbers:

    • Headline CPI, month over month: 0.3% increase vs. 0.2% expected

    • Headline CPI, year over year: 3.4% vs. 3.2% expected

    • “Core” CPI, year over year: 3.9% vs. 3.8% expected

    Yahoo Finance’s Josh Schafer has all the details here.

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