US stocks came off session lows on Thursday afternoon despite a new December inflation reading that came in slightly hotter than economists had expected, raising new questions about the Federal Reserve's path on interest rates.
The S&P 500 (^GSPC) traded about 0.2% lower after the benchmark neared a new high on Wednesday, closing at its highest level since January 2022. The Dow Jones Industrial Average (^DJI) was down 0.1% and the Nasdaq (^ ^IXIC) fell by 0.2% during Thursday's trading session.
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, US Bitcoin ETFs (full list here) began trading on Thursday after the Securities and Exchange Commission gave regulatory approval on Wednesday.
Bitcoin (BTC-USD) held more than $46,000 per token, 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.
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