By Johann M Cherian and Sukriti Gupta
(Reuters) – Wall Street’s major indexes jumped on Wednesday, with the benchmark index hitting a one-week high, propelled by weaker-than-expected core inflation data for December and strong quarterly earnings results. largest American banks.
At 9:41 a.m. ET, the index rose 613.51 points, or 1.44%, to 43,131.79, the S&P 500 gained 85.16 points, or 1.46%, to 5,928.07 , and rose 335.07 points, or 1.76%, to 19,379.64.
The domestically focused small-cap index jumped 2.3%.
A report from the Labor Ministry showed that the consumer price index rose in line with expectations in December. Markets, however, focused on the core CPI figures, which rose 3.2%, less than estimates of a 3.3% rise.
Traders had been pricing in near-equal odds that the Federal Reserve would cut interest rates twice by the end of 2025, with the first cut coming in June.
The yield on the benchmark Treasury note fell from its 14-month high and was last at 4.64%, contributing to a 2.2% gain in real estate stocks, which led progression among the 11 sectors of the S&P 500.
Markets were also focused on the quarterly results of the big banks.
JPMorgan Chase & Co (NYSE:) climbed 0.6% after the credit giant posted a record fourth-quarter annual profit, while Wells Fargo (NYSE:) added 4.2% after its fourth-quarter profit beat Street expectations, as a rebound in trading activity boosted its investment banking business.
Goldman Sachs gains 4.9% after posting its best quarterly profit since the third quarter of 2021, while Citi Group (NYSE:) posted a profit in the fourth quarter, sending its shares up 3.9%.
“It’s the confluence of two bullish factors,” said Adam Sarhan, managing director of 50 Park Investments.
“First, you have inflation that is not out of control, which leaves the door open for more easy money from the Fed. And second, you have the profits of the big banks, which are showing bullishness “
The S&P 500 banks index rose 1.9%, putting it on track for gains of around 5% in January. The index outperformed major Wall Street indexes, which are expected to post modest gains for the month, including Wednesday’s advances.
In 2024, the banking index recorded its biggest annual rise since 2019, driven by expectations that U.S. President-elect Donald Trump’s policies, such as tax cuts and relaxed regulations, could boost the financial sector.
Of the 28 S&P 500 companies that have reported fourth-quarter results so far, 82.1% have beaten estimates, according to data compiled by LSEG.
Remarks from New York Fed President John Williams and Chicago Fed President Austan Goolsbee will be analyzed later today. The central bank is also expected to unveil its beige book on economic activity at 2:00 p.m. ET.
BlackRock (NYSE:) rose 3.9% after its assets hit a record high of $11.6 trillion in the fourth quarter.
Advancing issues outnumbered declining issues by a ratio of 13.19 to 1 on the NYSE and 4.74 to 1 on the Nasdaq.
The S&P 500 recorded 13 new 52-week highs and no new lows, while the Nasdaq Composite recorded 37 new highs and 25 new lows.
