Traders work on the floor of the New York Stock Exchange during morning trading on January 17, 2023 in New York City.
Michael M. Santiago | Getty Images
The S&P 500 rose on Wednesday after the latest data provided another sign that inflation, while still elevated, is starting to ease.
The broad stock index climbed 0.4%, while the Nasdaq Composite rose 0.9% and entered its eighth straight day. Meanwhile, the Dow Jones Industrial Average fell 95 points, or 0.3%.
The moves came after the latest reading of the Producer Price Index, which measures business input costs and could be a leading indicator of future inflation, showed a 0.5% decline for December. . Economists polled by Dow Jones expected a decline of 0.1%. This provided relief to investors who had hoped inflation would ease and the Federal Reserve would slow or halt its rate hikes.
“While the Fed has remained hawkish throughout 2022 by aggressively raising rates to contain inflation, December’s PPI print bodes well for the Fed easing its recently very tight monetary policy,” said said Greg Bassuk, CEO of AXS Investments.
“With consensus still in place for the Fed to raise rates again in February, falling inflation numbers represent a powerful data point supporting the likelihood that the Fed’s rate hike actions will begin to wind down. here in 2023,” he added.
US Treasury yields fell after the data was released, giving growth-oriented stocks like Tesla and Plug Power a boost. Amazon rose more than 1% even as it began a big streak of layoffs on Wednesday.
Elsewhere, United Airlines shares rose after the company beat Wall Street estimates last quarter, propelled by strong travel demand.
Meanwhile, shares of Moderna jumped after the pharmaceutical company said its vaccine targeting respiratory syncytial virus can prevent the disease in older people.
On Tuesday, the Dow Jones closed lower, ending a four-game winning streak. The S&P 500 also fell, while the Nasdaq ended its seventh consecutive positive day. The moves follow earnings results from big banks that suggest divergent paths, even for names in the same sector.