Stock Market Today: Stocks Close Flat After Mixed Inflation Data

Stocks opened higher following this morning's release of the December Consumer Price Index (CPI). However, this initial burst of purchasing power faded throughout the session as market participants reflected on the mixed report.

Before the opening bell, the Bureau of Labor Statistics said owner inflation it was up 0.3% month-over-month in December and up 3.4% year-over-year. Both figures are higher than what was observed in the November CPI and the annual increase was the largest in three months.

On the other hand, core inflation, which excludes volatile food and energy Prices rose 0.3% monthly, matching November's figure. On an annual basis, core CPI was 3.9% higher, the smallest year-on-year increase since May 2021.

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"The big picture is that the economic disruptions caused by the pandemic are fading, economic growth is settling into a more normal pace and labor shortages are much less of an issue, helping inflation return to normal." normality," he says Bill Adams, chief economist at Comerica Bank. "Slower trend inflation is clearing the way for the Federal Reserve to begin reducing US interest rates. Interest rates," Adams adds, leading financial markets to expect rate cuts as early as March.

In fact, even in the current heat December CPI reading – and a Bloomberg interview with Cleveland Fed President Loretta Mester, where she said March is "probably too early" for rate cuts - market participants refuse to budge on their dovish outlook. According to the CME Group FedWatch ToolFutures traders are pricing in a 68% chance of a quarter-point rate cut at the Federal Reserve's March meeting, up from 62% a week ago.

"Given financial market prices, the risks lean toward an earlier and faster reduction in interest rates," says Comerica's Adams.

Bitcoin Fades After Initial Pop

Elsewhere, bitcoin jumped to a nearly two-year high above $49,000 earlier after the Securities and Exchange Commission (SEC) approved last night detect bitcoin ETF. However, the digital currency was around $46,300 when the stock market closed.

A similar reversal was seen in several cryptocurrency-related stocks, including Coinbase Global (CURRENCY-6.7%), Robinhood Markets (HOOD-3.5%) and Digital marathon entries (MARA-12.6%).

Paramount Shares Plunge After New Sell Rating

Paramount Global (FOR) was another stock that fell sharply on Thursday. Shares fell 5.5% after Redburn Atlantic Analyst Hamilton Faber downgraded PARA, a member of Warren Buffett's Berkshire Hathaway Stock Portfolio – Sell from Hold, citing a “negative tipping point” in linear advertising that is not adequately reflected in analyst forecasts.

Faber demoted Warner Bros. Discovery (W.B.D.-3.9%) to Hold from Buy for the same reason.

Regarding the main indices, the Nasdaq Compound obtained a marginal profit of 14,970, the S&P 500 fell 0.07% to 4,780, and the Dow Jones Industrial Average rose 0.04% to 37,711.

Stock Market Today: Stocks Close Flat After Mixed Inflation Data

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