US stocks fell on Thursday morning despite a new December inflation reading that was slightly hotter than economists had expected, raising new questions about the Federal Reserve’s path on interest rates.
The S&P 500 (^GSPC) fell about 0.6% after the index ended Wednesday at its highest close since January 2022, just short of setting a new record. The Dow Jones Industrial Average (^DJI) and Nasdaq (^IXIC) fell 0.6%.
Stocks struggled this week as investors counted down to the US consumer inflation reading for December. This reading showed a slightly larger jump than expected, as prices rose by 0.3% on a monthly basis and 3.4% on an annual basis. On a “core” basis, which excludes volatile food and energy categories, inflation rose 3.9% over the past year.
This reading was considered crucial for traders who have been increasingly calculating the odds of a “soft landing” – where inflation falls to 2% without an economic contraction – since the last CPI report.
Meanwhile, cryptocurrency stocks got a boost after the Securities and Exchange Commission granted regulatory approval for bitcoin ETFs in the US to begin trading on Thursday, which is seen as a game-changer for the sector. Shares in exchange Coinbase (COIN) and mining company Marathon Digital (MARA) were among those that rose in pre-market trading.
Bitcoin (BTC-USD) rose above $47,000 to trade at its highest levels since March 2022, while rival ethereum (ETH-USD) jumped amid bets that the second-largest token is next to get the ETF’s green light.
Ahead of its quarterly financial update on Friday, Citigroup (C) said it would take more than $3 billion in reserves and one-time expenses into the results. Q4 earnings season is crucial for stocks, given their poor performance so far this year.
He lives3 updates
Click here for in-depth analysis of the latest stock market news and events that move stock prices.
Read the latest financial and business news from Yahoo Finance