US Markets Advance as Inflation Cools

Hockey player splashing face with water.

Getty Images / David Berding

Key Takeaways

  • U.S. equities advanced, with all three major indexes posting gains.
  • The Consumer Price Index (CPI) fell month-over-month for the first time since 2020.
  • Shares of American Airlines (AAL) and United Airlines (UAL) advanced 9% and 7%, respectively, after American Airlines raised profit and sales guidance for the fourth quarter.
Market gains for Jan. 12, 2023.

U.S. equities moved higher, with the Nasdaq posting its fifth-straight winning session, after a report showed consumer prices continued to ease in December.

The Labor Department’s Consumer Price Index (CPI) fell for the first time since May 2020, and the annual increase was the lowest since October 2021, suggesting the Federal Reserve may be able to pull back on its aggressive efforts to fight inflation.

Walt Disney (DIS) was the Dow leader, with shares rising 3.5%, as activist investor Nelson Peltz announced a proxy fight aimed at getting him on the company’s board. An analyst upgrade lifted Boeing (BA) shares 3%, and shares of Salesforce (CRM) also gained 3% as Walmart (WMT) said it would sell its pickup and delivery technology services through Salesforce’s AppExchange. Eight other Dow stocks, including Caterpillar (CAT) and Honeywell (HON), advanced 1% or more.

American Airlines (AAL) was the best-performing stock in the S&P 500 after the carrier significantly raised its fourth-quarter profit and sales outlook. Shares of rival carriers and other travel-related firms advanced as well. Oil futures moved above $78 a barrel, and that boosted shares of companies in the energy sector, including Chevron (CVX) and SLB (SLB). 

Gold prices rose again, reaching $1,900 an ounce, and that helped raise shares of miners, such as Newmont Corporation (NEM) and Barrick Gold (GOLD). The meme stock rally continued, with shares of Bed Bath & Beyond (BBBY), Party City (PRTY), and Carvana (CVNA) up more than 45%.

S&P 500 biggest gains and losses for Jan. 12, 2023.

Shares of Biotech Firms Drop

Shares of biotech firms, including Illumina (ILMN) and Bio-Techne (TECH), tumbled. KB Home (KBH) blamed rising interest rates and inflation for reduced demand and cancellations in the previous quarter, and shares sank. Dollar General (DG) shares lost ground for a second-straight session as the Attorney General of Ohio asked a judge to block the discount retailer’s pricing practices. 

The inflation news impacted bonds, the U.S. dollar, and cryptocurrencies. The yield on the 10-year Treasury note tumbled, as did the U.S. dollar versus the euro, pound, and yen. Prices for major digital currencies took off, with Bitcoin trading above $18,000 for the first time since FTX's collapse rattled the market in early November.

BTCUSD 1/12/2023


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