U.S. stocks showed minimal movement today, taking a break after Wednesday’s impressive rally. The rally was driven by cooling inflation and robust bank earnings, marking the largest daily percentage gain since November 6.
Mixed Economic Data Highlights
Investors largely ignored weaker-than-expected December retail sales and rising weekly jobless claims. The Commerce Department reported retail sales grew by 0.4% in December, falling short of the 0.6% increase economists had forecast. Weekly unemployment claims rose by 14,000 to 217,000, exceeding the anticipated 210,000.
Key indexes saw slight declines: the S&P 500 dropped 0.21% to close at 5,937.34, the Dow dipped 0.16% to 43,153.13, and the Nasdaq fell 0.89% to 19,338.29. Meanwhile, the 10-year Treasury yield eased to 4.615% after Federal Reserve officials hinted at the possibility of further rate cuts this year. However, economists adjusted expectations for fewer rate reductions following Friday’s strong jobs report.
Banks Shine Amid Earnings Season
Bank stocks extended gains as strong earnings reports continued to roll in. Bank of America and Morgan Stanley exceeded analysts’ forecasts for fourth-quarter results, bolstered by their investment banking divisions. Earlier, JP Morgan, Goldman Sachs, Wells Fargo, and Citigroup also reported solid earnings.
Samer Hasn, senior market analyst at XS.com, noted that strong bank performance signals optimism about the U.S. economy’s resilience in a high-interest-rate environment.
Other Noteworthy Stocks
- UnitedHealthcare: Shares declined after missing quarterly revenue forecasts in its first earnings report since executive Brian Thompson’s death.
- TSMC: Shares surged following record quarterly results, driven by AI demand, lifting other semiconductor stocks like Nvidia and Broadcom.
- BP: Gained slightly as it announced plans to cut 7,700 roles to reduce costs.
- Target: Shares dropped despite raising fourth-quarter sales guidance, with investors concerned about profit margins.
- American Express: Fell slightly after agreeing to pay $230 million in penalties over deceptive practices involving small-business credit cards.
Trump Treasury Pick Faces Scrutiny
Scott Bessent, President-elect Donald Trump’s Treasury nominee, faced Senate questioning. He backed tariffs, tax cuts, additional sanctions on Russian oil, and Federal Reserve independence. Bessent opposed creating a central bank digital dollar, favoring the traditional U.S. dollar instead.
Bitcoin Briefly Crosses $100,000
Bitcoin surged past the $100,000 milestone amid reports of Trump considering a cryptocurrency reserve. However, it ended the day down 0.25%, at $100,184.70. Reports suggest the proposed reserve could include other cryptocurrencies like Solana and XRP, alongside Bitcoin.