Stock market today/ inflation data/ Wall Street news/ S&P 500/ Federal Reserve rate cut/ Trump economy/ bond yields/ Newslooks/ NEW YORK/ J. Mansour/ Morning Edition/ U.S. stocks traded near record levels Wednesday as inflation data met expectations, reinforcing optimism about a potential Federal Reserve rate cut next month. Major indexes were slightly up, while bond yields dipped. Economic forecasts remain mixed as markets eye the impact of Trump’s election win on future policy shifts.
Wall Street Steady After Expected Inflation Data Fuels Rate Cut Hopes
Key Updates
Stocks Drift After Expected Inflation Data
The U.S. stock market saw minimal changes Wednesday, holding near record levels after October inflation data matched forecasts, giving investors hope for a December rate cut. The S&P 500 edged up 0.1%, while the Dow Jones rose 72 points, or 0.2%, and the Nasdaq composite gained 0.1%.
Bond Yields Decline, Bolstering Stocks
Lower bond yields offered support to the stock market, with the 10-year Treasury yield dropping to 4.38% from 4.43% after the inflation report. Core inflation, which excludes volatile sectors like food and energy, remained steady, a sign that inflation pressures might be under control.
Fed Rate Cut Anticipated in December
With inflation trending as expected, analysts believe the Federal Reserve is likely to cut rates again in December. Having already reduced rates twice to support the economy and job market, the Fed may continue its accommodative stance. Goldman Sachs noted that the data “leaves the Fed on track” for another cut.
Economic Outlook Shifts with Trump’s Election
Economists speculate that Trump’s policies, including potential tax cuts, higher tariffs, and deregulation, could impact inflation and debt levels. These anticipated changes may influence the Fed’s plans for additional rate cuts in 2025, adding complexity to long-term economic projections.
Market Commentary and Inflation Outlook
The latest Consumer Price Index (CPI) data calmed concerns of accelerating inflation, with Wells Fargo’s Scott Wren stating that while inflation may edge up next year, today’s report “won’t do much to the market.” Positive economic indicators from recent months had raised worries about inflation pressures, but Wednesday’s report suggests stability for now.
Stock Movements: Amgen Gains, Spirit Airlines Drops
Amgen’s shares rose 1.9% following a favorable study on a potential obesity treatment, which showed no bone safety risks. Spirit Airlines, however, plunged 56.4% as it negotiated debt repayments that could protect customers but risk wiping out stockholders’ equity.
Global and Crypto Markets React
Asian markets closed lower, with Japan’s Nikkei 225 down 1.7% due to rising inflation concerns, and South Korea’s Kospi dropping 2.6% as Samsung shares declined. In the cryptocurrency space, bitcoin surpassed $90,000, buoyed by Trump’s pro-crypto stance. Dogecoin rose 15% following Trump’s nod to Elon Musk as head of a “Department of Government Efficiency” (DOGE).
Conclusion
The alignment of inflation data with market expectations has set the stage for a potential Federal Reserve rate cut in December, providing a stabilizing influence for Wall Street. As markets anticipate shifts under Trump’s economic policies, analysts will be watching closely for any emerging inflationary pressures or changes in the Fed’s strategy heading into 2025.
