Wall Street ends galvanized by American inflation and bank results

(Washington) The New York Stock Exchange ended sharply higher on Wednesday, propelled by American inflation figures and increased quarterly results from the banking sector.

The Dow Jones advanced 1.65%, the NASDAQ index jumped 2.45% and the broader S&P 500 index gained 1.83%.

According to the Consumer Price Index (CPI) published on Wednesday, inflation accelerated again in December in the United States, for the third month in a row, to 2.9% year-on-year, compared to 2.7 % in November, in line with Bloomberg consensus expectations.

But over a month, core inflation, which excludes volatile energy and food prices, slowed to 0.2%, where economists had been betting on a stable figure of 0.3%.

Consumer prices “provided much relief,” not least because year-on-year core inflation “declined for the first time since July, thus helping to reinforce expectations that the downward trend remains in place », Underlines to AFP Angelo Kourkafas, from Edward Jones.

Today’s data “potentially leaves the door open to a rate cut by the American Federal Reserve (Fed)” during the first half of the year, adds the analyst.

Investors have been worried for several days about the possibility of a rebound in inflation in the world’s largest economy, which would push the American central bank to put the brakes on its monetary easing policy.

In this context and following the publication of the CPI index, the yield on ten-year US government bonds eased very significantly, settling around 4:30 p.m. (Eastern time) at 4 .65% compared to 4.79% the day before at closing. On the two-year maturity, it stood at 4.26% compared to 4.36%.

“It’s an important movement” which counters weeks of investor pessimism according to Mr. Kourkafas.

Another engine that pushed the main indices of the New York market upwards, the major American banks presented quarterly results on Wednesday with an increase, sometimes significant, thanks to the growth in income in market activities and banking. business.

“Banks, which are a sector very linked to the health of the economy and which could potentially benefit from deregulation and the pro-growth policies of the new US administration, are a good confirmation that we can finally see some expansion market leadership beyond tech mega-caps,” explains Angelo Kourkafas.

Wells Fargo climbed 6.69%, Citigroup rose 6.49%, Goldman Sachs gained 6.02% and JPMorgan Chase advanced 1.97%. In their wake, Blackrock, the world’s leading asset manager which had a record fourth quarter and 2024, jumped 5.19%.

Elsewhere on the stock market, electric vehicle manufacturer Tesla rose 8.04% after a recommendation increase from Barclays.