Stock Market News: S&P Set to Open Up After PPI Data
Stocks opened higher on Tuesday after wholesale price inflation cooled in December.
The Dow Jones Industrial Average was up 200 points, or 0.5%. The S&P 500 was up 0.6%. The Nasdaq Composite rose 0.9%.
The yield on the 2-year Treasury note was down to 4.38%. The 10-year yield was down to 4.78%.
The producer price index for December rose at a 0.2% monthly rate, which was below expectations at 0.3% and down from 0.4% in November.
“PPI numbers were much better than expected but the reasons behind it seem to be one off, with a big drop in raw materials, which has already reversed since Mid December,” writes Andrew Brenner, head of international fixed income at NatAlliance Securities.
Worries about inflation have dragged on stocks and sent bond yields rising in recent weeks. Though Wall Street cleared its first inflation hurdle of the week, tomorrow’s consumer price index for December will likely be an even bigger event for markets.
“CPI continues to loom as to whether we get new highs of yields,” Brenner writes. “The Fed is in the background until the next employment number.”
The Federal Reserve is widely expected to keep interest rates steady at its Jan. 28-29 policy meeting, but traders are jittery about the rest of the year. Odds of no cuts in 2025 are at 28.2%, according to the CME FedWatch Tool. Odds of just one quarter-point cut are at 39.9%, while odds of a half-point in cuts are at 23.2%.