Wall Street rallies on robust bank earnings and positive inflation news

On By Littum


New York
CNN
—

US stocks rose on Wednesday after an encouraging inflation report and big profits for some of America’s biggest banks.

The Dow rose more than 700 points, or 1.74%, the S&P 500 gained 1.75% and the tech-heavy Nasdaq rose 2.2%.

Stocks started the day much higher and rose in premarket trade after the latest inflation data showed a slowdown in the core measure of the consumer price index for the first time in months, rising just 0.2% from November and falling to 3.2% year over year after have remained at 3.3% since September 2024.

That’s an improvement despite headline consumer prices rising 2.9% year-on-year in December, up from 2.7% the month before, according to Bureau of Labor Statistics data released Wednesday.

“We think the market will be encouraged by the decline in core inflation, which should relieve some of the pressure on equity and bond markets, both of which have had a poor start to the year due to inflation fears and concerns that the Federal Reserve would not only stop cutting rates, but could even reverse course and start raising them,” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in a note.

Robust fourth-quarter bank earnings are a positive signal for the well-being of the biggest players in US financial markets ahead of President-elect Donald Trump’s return to the White House.

JPMorgan Chase wrote one record annual profitt of $58.5 billion that raked in $14 billion in net income in the fourth quarter as an environment of lower interest rates and post-election market volatility proved profitable for the bank.

Goldman Sachs also delivered strong earnings on Wednesday, with a profit of $4.11 billion fourth quartermore than double its profits i fourth quarter 2023.

Citi had a profit of $2.9 billion fourth quarter 2024 compared to a loss of $1.8 billion in fourth quarter 2023. That was “primarily driven by the higher revenues, lower costs and lower credit costs,” according to a Citi press release.

This is a developing story and will be updated.