Markets hold steady after inflation report; investors eye potential rate cut and upcoming data
On Wednesday, the S&P 500 and the Dow Jones Industrial Average closed near the flatline as the post-election rally slowed, CNBC reported.
Traders also focused on a key US inflation report, which met expectations. The S&P 500 edged up 0.02 percent to 5,985.38, while the Dow gained 47.21 points, or 0.11 percent, closing at 43,958.19 after an earlier increase of 230 points.
Meanwhile, the Nasdaq Composite fell 0.26 percent, ending the day at 19,230.74.
The October US consumer price index (CPI) increased to an annual rate of 2.6 percent, aligning with estimates from a Dow Jones survey.
Core CPI, which excludes food and energy costs, rose by 3.3 percent last month, also matching forecasts.
Following the report, fed funds futures trading suggested a high likelihood of a rate cut by the central bank in December, based on CME FedWatch tool data.
“It’s time to stop worrying about the Fed and inflation,” said David Russell, global head of market strategy at TradeStation. “Stocks have been on autopilot since the election and today’s numbers do nothing to hurt the trend. December is still in play for a cut.”
The market had pulled back on Tuesday, as the Dow dropped about 382 points, or 0.9 percent, the S&P 500 fell 0.3 percent, and the Nasdaq Composite slipped 0.1 percent, all easing from the post-election rally.
The post-election surge, following Donald Trump’s recent victory, had lifted stocks to record levels.
On Monday, the Dow surpassed 44,000 for the first time, with the S&P 500 and Nasdaq Composite reaching new highs as well.
Cryptocurrencies joined the rally, with bitcoin briefly rising above $93,000 on Wednesday on hopes that Trump might fulfil his promises to the crypto sector.
Further economic data, including the producer price index and retail sales figures, are expected later in the week, on Thursday and Friday, respectively.
