US Markets Today: Wall Street Rallies As Inflation Cools And Banks Beat Expectations

All three major US stock market indices opened higher on Wednesday, buoyed by positive economic data and strong earnings. The latest Consumer Price Index report revealed an unexpected slowdown in core inflation for December, while major US banks kicked off the earnings season with impressive results.

The broader index, S&P 500, opened 1.37% higher at 5,922.92 and the tech-heavy Nasdaq Composite opened 0.85% higher at 19,207.75 as trading commenced on Wall Street. 

The 30-stock Dow Jones Industrial Average opened around 0.96% higher at 42,927.76.

In the early minutes of trading, Goldman Sachs Group Inc. and BlackRock Inc. showed impressive gains and have risen as much as 5.63% and 6.47%.

US consumer prices rose in Dec. at a slower pace than expected, reflecting a moderation in underlying inflation. The core CPI, which excludes food and energy costs, increased 0.2% following four consecutive months of 0.3% gains, according to Bureau of Labour Statistics data released Wednesday. The slowdown was attributed to cheaper hotel stays, a smaller increase in medical care services, and relatively subdued rent hikes.

Goldman Sachs exceeded expectations, with its equity traders delivering a record-breaking year. The firm’s fourth-quarter profits more than doubled to $4.1 billion, driven by robust performance in its investment banking division, the expansion of its asset management business, and a $472 million gain from a balance sheet investment. Shares of Goldman Sachs rose as much as 5.63% to $603.71 in intraday trade.

Citigroup Inc. also surpassed forecasts, reporting a revenue of $1.2 billion against expectations of $1.5 billion. The bank announced a $20 billion stock buyback, which boosted investor sentiment. Shares climbed as much as 4.83% to $77.05 in intraday trade, marking an all-time high.

All 11 sectoral indices advanced in early trade, led by the utilities, consumer discretionary and financials sectors.

Among major companies, shares of Citigroup, Tesla Inc., Bank of America Corp. and Microsoft Corp. saw gains in early trade. On the other hand, UnitedHealth Group, Lululemon Athletica Inc., Hershey Co. and Abbott Laboratories saw declines.

Before the US market opened for trade, its Asian peers settled on a mixed note. The Indian benchmark index NSE Nifty 50 closed 0.16% higher, Japan's Nikkei 225 shed 0.08%, Hong Kong's Hang Seng index rose 0.34% and mainland China's Shanghai Composite 0.43% lower. 

Among other asset classes, the yield on 10-year US Treasury bonds declined 13 basis points to 4.67%. 

The dollar index fell 0.5%. The euro rose 0.3% to $1.0336 and the British pound rose 0.6% to $1.2292. The Japanese yen rose 1.2% to 156.14 per dollar.

In the commodities market, spot gold rose 0.3% to $2,686.66 an ounce. Brent crude, the global oil benchmark, rose 0.83% to $80.58 per barrel.

Bitcoin, the world's largest traded cryptocurrency, rose 2.7% to $98,991.51.