US stocks climbed on Wednesday after inflation data boosted investors’ hopes for interest rate cut by the Federal Reserve this year.
Market participants also cheered a strong set of quarterly results from the biggest US banks.
At 09:41 a.m. ET the Dow Jones Industrial Average rose 613.51 points, or 1.44 per cent, to 43,131.79, the S&P 500 gained 85.16 points, or 1.46 per cent, to 5,928.07, and the Nasdaq Composite rose 335.07 points, or 1.76 per cent, to 19,379.64.
At the opening bell, the Dow Jones Industrial Average rose 409.5 points, or 0.96 per cent, to 42,927.76. The S&P 500 rose 62.3 points, or 1.07 per cent, to 5,905.21, while the Nasdaq Composite rose 305.9 points, or 1.61 per cent, to 19,350.313.
Inflation data
A Labor Department report showed the Consumer Price Index (CPI) rose 2.9 per cent on an annual basis in December 2024, the highest since last July.
On a monthly basis, the index rose 0.4 per cent. In November, the CPI stood at 2.7 per cent.
Excluding volatile food and energy components, the core CPI gained 3.2 per cent on an annual basis.
The latest inflation data strengthens the case that the Federal Reserve’s interest rate cutting cycle is not over yet.
The Fed will hold its next monetary policy meeting on January 28-29.
Bank stocks
JPMorgan Chase stock rose 0.6 per cent after the lending giant posted a record annual profit in the fourth quarter, while Wells Fargo added 4.2 per cent after its fourth quarter profit beat Wall Street estimates.
Goldman Sachs gained 4.9 per cent after it posted upbeat quarterly profit. Citigroup added 3.9 per cent. after its earnings.
In the bond market, the yield on the 10-year Treasury dropped to 4.65 per cent from 4.79 per cent late on Tuesday. The 2-year Treasury yield fell to 4.26 per cent from 4.37 per cent.
Bullion
Gold prices extended gains on Wednesday, as the US dollar dipped after the inflation data.
Spot gold gained 0.4 per cent to $2,688.19 per ounce by 0915 a.m. ET (1415 GMT). US gold futures were up 1.1 per cent to $2,711.40.
Spot silver firmed 1 per cent to $30.23 per ounce.
