Big Tech dips while US utilities and banks gain; traders await CPI report to gauge inflation trends
On Tuesday, the Dow Jones Industrial Average rose as traders analysed a lighter-than-expected US producer price index (PPI) report, according to CNBC.
The Dow gained 221.16 points, or 0.52 percent, closing at 42,518.28. The S&P 500 advanced 0.11 percent to 5,842.91, while the tech-heavy Nasdaq Composite slipped 0.23 percent to 19,044.39.
The PPI, which tracks wholesale inflation, increased by 0.2 percent in December, falling short of the 0.4 percent rise economists polled by Dow Jones had anticipated.
US Core PPI, excluding food and energy, remained flat, according to the Bureau of Labor Statistics.
Big Tech stocks saw declines, with Nvidia falling 1.1 percent and Meta Platforms dropping 2.3 percent, weighing on the S&P 500 and Nasdaq.
Meanwhile, utilities, financials, and materials sectors gained over 1 percent each. The SPDR S&P Regional Bank ETF (KRE) and SPDR S&P Bank ETF (KBE) surged 3 percent each.
Investors are now awaiting Wednesday’s US consumer price index (CPI) report to assess the Federal Reserve’s progress toward its 2 percent inflation target.
US Economists forecast a 0.3 percent rise in headline CPI for December, as reported by Dow Jones.
“If CPI comes in hotter than expected, it would certainly be bad news for equity markets because it would imply that the Fed will indeed remain slower to lower interest rates,” said Sam Stovall, chief investment strategist at CFRA Research.
Fed funds futures trading indicates near-certainty that the Federal Reserve will maintain current interest rates at its upcoming two-day meeting.
Market pricing reflects a 77.9 percent likelihood that the target range of 4.25-4.5 percent will remain unchanged through March, as per the CME FedWatch tool.
Looking ahead, major US banks are set to release their fourth-quarter earnings. JPMorgan Chase, Citigroup, Goldman Sachs, and Wells Fargo are scheduled to report on Wednesday, with Morgan Stanley and Bank of America following on Thursday.
