U.S. stocks rose Thursday morning even though December's inflation rate was slightly higher than economists expected, raising new questions about the Federal Reserve's interest rate policy.
The S&P 500 (^GSPC) rose about 0.2% on Wednesday after the benchmark closed at its highest close since January 2022, but fell just short of setting a new record. The Dow Jones Industrial Average (^DJI) rose 0.1%, and the tech-heavy Nasdaq led the way, rising 0.3%.
Stocks struggled this week as investors counted down December's U.S. consumer inflation data. This measure showed a slightly larger than expected increase as prices rose 0.3% month-over-month and 3.4% year-over-year. On a “core” basis, which excludes the volatile food and energy sectors, inflation rose 3.9% over the past year.
The print publication was seen as important for traders, who have been increasingly pricing in the possibility of a “soft landing” (inflation retreating to 2% without a recession) since the last CPI report.
Meanwhile, crypto stocks rose after the SEC on Thursday gave regulatory approval to begin trading in a spot Bitcoin ETF in the US, which is seen as a game-changer for the sector. Shares of exchanges Coinbase (COIN) and Miner Marathon Digital (MARA) were among the stocks that rose in pre-market trading.
Bitcoin (BTC-USD) trades above $47,000, its highest since March 2022, while rivals trade amid bets that the next-largest token will get the green light for an ETF. Ether (ETH-USD) soared.
Ahead of Friday's quarterly earnings report, Citigroup (C) announced that it would take more than $3 billion in one-time provisions and expenses to close the year. Given the dismal performance so far this year, fourth-quarter earnings season is critical for stocks.
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