Stocks rallied on lower US inflation and strong earnings from major banks

From Nasdaq: 2025-01-15 19:00:47

Stocks surged on Wednesday as the S&P 500, Dow, and Nasdaq all closed higher. E-mini S&P and Nasdaq futures also rose. Strong earnings from major banks like Citigroup and JPMorgan boosted the market. Bond yields fell after a Fed-friendly inflation report, fueling rate cut speculation. The Fed’s Beige Book painted a positive economic picture.

US MBA mortgage applications spiked by 33.3% as rates rose to an 8-month high. Dec CPI in the US met expectations, but core CPI eased. The Jan Empire manufacturing survey revealed a surprising decline. Fed comments hinted at a restrictive stance to reach the 2% inflation target. Markets await Thursday’s retail sales report.

European government bond yields dipped, influenced by the UK’s lower-than-expected Dec CPI. Eurozone industrial production met expectations. Swaps indicate a high likelihood of a rate cut by the ECB. US stock movers included Tesla, which soared, and banks like Bank of New York Mellon and Goldman Sachs. Home builders also saw gains.

Intuitive Surgical’s strong Q4 revenue propelled its stock. Citigroup and Wells Fargo beat estimates, while BlackRock and Goldman Sachs impressed with earnings. Megacap tech stocks like Alphabet and Nvidia also performed well. Defensive pharmaceutical stocks like Viatris and AbbVie saw declines. Paramount Global faced scrutiny over a merger with Skydance Media.

Earnings reports for January 16, 2025, include Bank of America Corp, Morgan Stanley, and UnitedHealth Group Inc. The market remains focused on earnings releases and economic data for further direction. Overseas markets saw mixed results, with the Euro Stoxx 50 up and China’s Shanghai Composite down. Bond yields fell sharply, benefiting home builders and building suppliers.



Read more at Nasdaq: Stocks Finish Sharply Higher on a Surprise Slowdown in US Inflation