U.S. Stocks Pull Ahead, Core Inflation Held Steady at 4%

Barry Adams
12 Dec, 2023
New York City

Stocks advanced in early trading on Wall Street after the latest inflation report matched market expectations.

The S&P 500 index and the Nasdaq Composite traded higher for three days in a row, and two popular benchmarks gained for six consecutive weeks.

The Federal Reserve is also set to announce its rate decision Wednesday at the end of its two-day policy meeting.

Investors widely anticipate the central bank holding the fed funds rate range between 5.25% and 5.50% for the third time in a row.

Market indexes have soared and stretched this year's gains in the hopes that the robust labor market conditions are likely to help the Federal Reserve navigate the economy to slower growth near 2% and avoid a recession while simultaneously cooling inflation to its target range of 2%.

 

U.S. Consumer Price Inflation Slowed to 3.1% 

The consumer price index in November rose 0.1% from the previous month and increased 3.1% from a year ago, the Bureau of Labor Statistics reported Tuesday.

Core inflation, which excludes food and energy, rose 0.3% in November after rising 0.2% in October.

On an annual basis, core inflation rose 4.0%, matching the expectations set by a group of five economists surveyed by Ticker.com.

Energy prices declined 5.4%, reflecting lower prices for gasoline, while food prices rose 2.9% and shelter costs soared 6.4% from a year ago.

 

U.S. Indexes and Yields

The S&P 500 index gained 0.2% to 4,614.87, and the Nasdaq Composite increased 0.03% to 14,407.05.

The yield on 2-year Treasury notes decreased to 4.69%, 10-year Treasury notes inched lower to 4.18%, and 30-year Treasury bonds increased to 4.28%.

Crude oil decreased $0.44 to $70.91 a barrel, and natural gas prices fell 1 cent to $2.44 a thermal unit.

Gold increased $6.64 to $1,988.15 an ounce ahead of the release of the inflation report today and the Fed's rate decision on Wednesday.  

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged higher to 103.70.

 

U.S. Stock Movers

Lucid Group decreased 2.8% to $4.48 after the company said chief financial officer Sherry House is resigning, effective immediately, to pursue other opportunities.

Ms. House will be available in an advisory role through the end of the year to assist in the transition of her duties.

Hasbro declined 5.3% to $46.30 after the toymaker announced its plan to lay off 1,100 workers, according to a memo cited by CNBC.

"The toymaker is grappling with soft sales that have continued into the holiday season and are “likely to persist into 2024,” chief executive Chris Cocks said in the memo to internal staff.

Alphabet Inc. decreased 0.7% to $132.33 after a federal jury in California ruled against the company's Google Android App Store filed by Fortnite video game maker Epic Games.

In a unanimous verdict, the jury said that the company's Android app Store has violated antitrust laws and secured billions of dollars in profit by forcing Play Store customers to use its high-priced payment processing.

Google said it plans to challenge the jury verdict, and the company will appeal the decision.

Oracle Corp. declined 8.9% to $104.91 after the database giant reported weaker-than-expected revenue in the fiscal second quarter.

The company reported weaker-than-estimated revenue in the cloud segment and database license support.