A welcomed cool-off in core inflation figures for December sparked a rally on Wall Street Wednesday, while major U.S. banks injected optimism into the market with impressive quarterly earnings.
The Dow Jones Industrial Average shot up by 654.07 points or 1.54% to 43,172.35 , marking a significant lift for the 30 prominent stocks. The S&P 500 climbed by 1.68%, and the tech-heavy Nasdaq Composite led the charge with a 2.27% increase.
In a surprising outcome, the Bureau of Labor Statistics reported core inflation—excluding volatile categories like food and energy—rose by 3.2% in December, slightly lower than economists’ consensus of 3.3% and a decrease from November’s figures. Meanwhile, headline inflation rose by 2.9% over the year, aligning with expectations.
The CPI report set off a notable drop in the 10-year Treasury yield, which fell to 4.686%, down by 10 basis points. Growth stocks reaped the benefits; Tesla saw a jump of around 5% while Nvidia gained 2%.
Kicking off the fourth-quarter earnings season with satisfying figures, big banks like JPMorgan Chase, Goldman Sachs, and Wells Fargo surpassed earnings forecasts. JPMorgan Chase shares inched up as the bank reported strong results in fixed income trading and investment banking, beating both EPS and revenue targets. Meanwhile, Goldman Sachs’ shares soared over 6% following a robust quarterly performance, and Wells Fargo experienced a 5.3% uptick after projecting a 1-3% rise in net interest income for 2025. Citigroup also joined the winning streak, with stock climbing 6% after its earnings outpaced expectations.
