Stock market today: Wall Street stays in neutral as markets wait for inflation report
Wall Street is drifting ahead of a report that could bolster or dash the hopes that sent stocks surging into the end of last year
NEW YORK — Wall Street is drifting Wednesday ahead of a report on inflation that could bolster or dash the hopes that sent stocks surging into the end of last year.
The S&P 500 was 0.3% higher in afternoon trading, a day after barely budging. The Dow Jones Industrial Average was up 65 points, or 0.2%, as of 1:35 p.m. Eastern time, and the Nasdaq composite was 0.6% higher.
The market’s focus is on Thursday, when the U.S. government will release its latest monthly update on inflation at the consumer level. A cooldown there from its peak in the summer of 2022 has raised hopes that the Federal Reserve may cut interest rates sharply this year. That in turn has sent Treasury yields easing in the bond market and stock prices rallying toward record heights.
Economists expect Thursday’s report to show prices paid by U.S. consumers were 3.2% higher in December than a year earlier, according to FactSet. That would be a slight acceleration from November’s 3.1% inflation rate. But after ignoring the effects of food and fuel prices, which can quickly shift month to month, economists believe underlying inflation trends likely continued to cool.
The Fed has noticed the cooldown in inflation, and it’s hinted at possibly cutting interest rates three times this year. That would be a sharp turnaround after it jacked rates dramatically higher in hopes of slowing the economy and hurting investment prices enough to grind down high inflation.
But many traders are anticipating double that number of rate cuts. Critics say that’s overly optimistic and that the Fed is unlikely to cut so many times unless a recession
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