U.S. Stock Market Surges on Lower Core CPI and Rate Cut Expectations

The U.S. stock market saw significant gains as the December core Consumer Price Index (CPI) came in lower than expected. This has raised the anticipation of a potential 25 basis point interest rate cut by the Federal Reserve in June, along with the possibility of two rate cuts within the year. As a result, U.S. Treasury yields experienced their largest drop in months.

The Nasdaq surged for the first time in six trading sessions, closing up 466 points or 2.5%, at 19,511 points, near its daily high. The S&P 500 increased by 107 points or 1.8%, finishing at 5,949 points. The Dow Jones Industrial Average rose for the third consecutive day, adding 703 points or 1.7%, to close at 43,221 points. These gains mark the best single-day performance for the indices since the post-election rally.

The fourth-quarter earnings season has begun with major banks outperforming Wall Street expectations. Goldman Sachs (GS), Citigroup (C), and Wells Fargo (WFC) each saw their stocks rise by over 6%, with JPMorgan Chase (JPM) up 2%. Tesla (TSLA, Financial) led the market rally with an 8% increase, while NVIDIA (NVDA) climbed more than 3%.

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