Stocks are rising with all eyes on the CPI report

US stocks rose on Wednesday as Wall Street counted bearish for the release of key consumer price data that is expected to show a further softening in inflation.

S&P 500 Index (^ The Salafist Group for Preaching and Combat(up 1.3%, while the Dow Jones Industrial Average rose)^ DJI) added more than 250 pips, or 0.8%. Nasdaq Technology Heavy Composite (^ ix) an advance of 1.8%.

US Treasury yields trimmed their move higher than the previous session, with the benchmark 10-year note falling below 3.6%. The US dollar index also declined.

Wells Fargo (WFC) was among the companies to focus on in early trade after the mega-bank said it late on Tuesday It will reduce home lending activity. The move by Wells Fargo, once a major mortgage lender, comes amid a slowdown in the housing market as high interest rates have deterred property purchases and refinancing agreements. The share price changed little.

Elsewhere, shares from two retailers On the verge of extinction continued to see intense trade. Party City stock (PRTY) is down 37% after surging around that much earlier in the day and is up 118% in the Tuesday session. Bloomberg News reported The company has sought funding for a possible Chapter 11 bankruptcy, citing people familiar with the preparations.

beleaguered retailer Bed Bath & Beyond (BBBY) back up again a week after it was announced that the company was considering bankruptcy due to its financial struggles. The meme stock jumped 68% after rising more than 50% over the previous two sessions.

Coinbase (CurrencyThe shares returned to close 1.3% higher after falling earlier in the day after Bank of America downgraded Neutral’s underperforming credit rating after the company said on Tuesday it would do so. It cut nearly 1,000 jobs as part of the restructuring plan.

A trader works on the trading floor of the New York Stock Exchange (NYSE) in New York City, US, January 5, 2023. REUTERS/Andrew Kelly

A trader works on the trading floor of the New York Stock Exchange (NYSE) in New York City, US, January 5, 2023. REUTERS/Andrew Kelly

The drums are getting louder regarding the December Consumer Price Index (CPI) Thursday morning. Economists expect the core consumer price index to rise 6.5% year-over-year last month, according to Bloomberg estimates. If true, the reading will indicate another It is sliding down from a 7.1% increase in November.

The report is likely to influence bets on whether the Fed will raise interest rates by 0.25% or 0.50% at the close of its next meeting on February 1, while providing hints about how much higher rates are likely to be at subsequent meetings.

Last Economic outlook from the December meeting of the Federal Reserve Officials showed that the overnight lending rate is expected to rise to 5.1% in 2023.

Several Fed officials, including San Francisco Fed President Mary Daley and Atlanta Fed President Raphael Bostick, confirmed this week that interest rates will likely go down. somewhere above 5%. and JPMorgan (JPMCEO Jamie Dimon predicted in an interview with Fox Business Network that aired Tuesday Rates can be as high as 6%.

However, DataTrek’s Nicholas Colas points to a “distinctly dovish” slant in the Fed Funds futures outlook since inception in 2023. According to the CME FedWatch Tool, odds of rates of 4.75% or higher are down a total of 13.7 percentage points.

“Markets flatly and decisively ignore the Fed’s rate guidance, less than a month after it was published,” Colas wrote in a note. Instead, futures – and therefore stock markets – expect the Fed to set interest rates at the end of the year in the range of 25-50 basis points from where they are today.

Alexandra Semenova is a correspondent at Yahoo Finance. Follow her on Twitter @tweet

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