Stocks Get Relief From CPI Slowdown as Yields Sink: Markets Wrap

Stock futures rose and bond yields sank after a slowdown in consumer prices bolstered speculation the Federal Reserve will still be able to cut interest rates this year.

Author of the article:

Bloomberg News

Rita Nazareth

Published Jan 15, 2025  •  2 minute read

US wholesale inflation unexpectedly cooled in December, helped by a drop in food costs and and flat services prices that may help temper concerns of lingering price pressures. The producer price index rose 0.2% from a month earlier. Michael McKee reports. Bloomberg

(Bloomberg) — Stock futures rose and bond yields sank after a slowdown in consumer prices bolstered speculation the Federal Reserve will still be able to cut interest rates this year.

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S&P 500 contracts climbed 1.5%. The yield on 10-year Treasuries declined 10 basis points to 4.69%. The Bloomberg Dollar Spot Index fell 0.5%. Swap traders are now pricing a in Fed cut by July versus September previously.

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The so-called core consumer price index — which excludes food and energy costs — increased 0.2% after rising 0.3% four straight months, Bureau of Labor Statistics figures showed Wednesday. From a year ago, it rose 3.2%.

“Wednesday’s softer-than-expected CPI print offers some relief, especially after last Friday’s hot employment numbers, that the Fed may be able to still cut interest rates in 2025,” said Skyler Weinand, chief investment officer at Regan Capital.

Corporate Highlights:

• Goldman Sachs Group Inc. cruised past estimates as its equity traders delivered their best year on record.
• JPMorgan Chase & Co.’s traders scored their biggest fourth-quarter haul ever, boosted by volatility tied to the US elections in November.
• Citigroup Inc. reported trading revenue for the fourth quarter that beat the average analyst estimate. The company also said its board had authorized the repurchase of $20 billion in common stock.
• Wells Fargo & Co. took a $647 million severance charge in the fourth quarter, as Chief Executive Officer Charlie Scharf continues to whittle headcount as part of broader efforts to slash costs and remake the bank.
• BlackRock Inc. hauled in an annual record of $641 billion in client cash, underlining the firm’s global reach across stocks and bonds, index and active funds and increasingly the fast-growing — and lucrative — market for private assets.
• NetApp Inc. has agreed to sell a portfolio of cloud software assets it acquired in recent years to Thoma Bravo-backed Flexera.

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Key events this week:

• ECB releases account of December policy meeting, Thursday
• Bank of America, Morgan Stanley earnings, Thursday
• US initial jobless claims, retail sales, import prices, Thursday
• China GDP, property prices, retail sales, industrial production, Friday
• Eurozone CPI, Friday
• US housing starts, industrial production, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures rose 1.5% as of 8:38 a.m. New York time
• Nasdaq 100 futures rose 1.7%
• Futures on the Dow Jones Industrial Average rose 1.4%
• The Stoxx Europe 600 rose 1.1%
• The MSCI World Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index fell 0.5%
• The euro rose 0.3% to $1.0340
• The British pound rose 0.7% to $1.2298
• The Japanese yen rose 1.1% to 156.30 per dollar

Cryptocurrencies

• Bitcoin rose 2.1% to $98,493.96
• Ether rose 1.7% to $3,270.05

Bonds

• The yield on 10-year Treasuries declined 10 basis points to 4.69%
• Germany’s 10-year yield declined seven basis points to 2.58%
• Britain’s 10-year yield declined 15 basis points to 4.74%

Commodities

• West Texas Intermediate crude rose 0.8% to $78.14 a barrel
• Spot gold rose 0.3% to $2,686.15 an ounce

This story was produced with the assistance of Bloomberg Automation.

—With assistance from Sujata Rao, Margaryta Kirakosian, Julien Ponthus and Winnie Hsu.

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