In a mixed start to the week, U.S. stocks opened on Tuesday with a delicate balance, hovering near record highs as investors closely monitored a crucial inflation report preceding the Federal Reserve’s final policy meeting of 2023.
The Dow Jones Industrial Average (^DJI) demonstrated resilience by edging up roughly 0.1%, or nearly 50 points, reflecting the underlying strength in the market. Meanwhile, the S&P 500 (^GSPC) experienced a minor setback, dropping approximately 0.1%. Contracts on the Nasdaq Composite (^IXIC), weighted heavily towards technology stocks, traded flat. This followed a noteworthy performance on Monday, where all three major indices concluded the day at their highest levels since early 2022.
The focal point of market attention was the release of the Consumer Price Index (CPI) for November. According to insights from Yahoo Finance’s Alexandra Canal, the CPI indicated a marginal uptick of 0.1% over the previous month and a 3.1% increase over the prior year. The data provided a snapshot of inflationary pressures, setting the stage for market expectations leading into the Federal Reserve’s pivotal two-day meeting commencing on Tuesday.
With anticipation building around potential shifts in monetary policy, investors are widely expecting a pause to rate hikes. The cautious sentiment is underscored by data from CME FedWatch, revealing a pullback in bets on a rate cut in March.
For the second consecutive month, consumer inflation is anticipated to remain flat. However, the “core” reading, which excludes the volatile elements of food and energy prices, presents a potential challenge. A stickier core inflation could prompt investors to reassess their expectations regarding the timing of any future rate adjustments by the Federal Reserve.
In the lead-up to the inflation report, U.S. bond yields experienced a retreat. The 10-year Treasury yields (^TNX) declined by roughly 4 basis points, settling around 4.19%. This movement indicates a cautious approach among investors in response to the impending economic data.
Shifting focus to individual stocks, Oracle (ORCL) faced a notable downturn, with shares plummeting over 10% in early trading. The decline was triggered by the software giant’s second-quarter sales figures falling short of market estimates. The market reaction to Oracle’s performance underscores the sensitivity of investors to corporate earnings and their impact on individual stock valuations.
In the culmination of today’s market activity, the resilience of U.S. stocks near record highs underscores the enduring confidence and stability within the financial landscape.
Source: Yahoo Finance
