US benchmark equity indexes experienced an uplift during intraday trading as investors analyzed the latest producer price report and awaited crucial consumer inflation data. The Dow Jones Industrial Average saw a gain of 0.4%, reaching 42,464.7, while the S&P 500 climbed 0.3% to 5,851.3. The Nasdaq Composite also made a modest advance of 0.1%, settling at 19,112.9.
Among various sectors, utilities emerged as the lead gainers, while the health care sector faced the largest drop in performance. In economic news, a surprising deceleration in US producer price growth was observed on a sequential basis last month. The Bureau of Labor Statistics indicated that while wholesale costs of services remained stable, gains in goods prices moderated.
Stifel provided insights, noting that 'a relatively more benign producer price report compared to expectations offers welcome relief for a Federal Reserve increasingly concerned about an acceleration in cost pressures.' They further added, 'While this morning's report does little to alter the likelihood – and necessity – for a policy pivot in the near term, it does ostensibly provide the Federal Open Market Committee with more leeway for policy adjustments as economic data continues to evolve with the new regime in Washington.' Expectations for the upcoming consumer price index data, due Wednesday, indicate a 0.4% month-on-month increase and a 2.9% year-on-year rise for December, as per a consensus compiled by Bloomberg.
Small business optimism reached its highest levels since October 2018, according to the December survey conducted by the National Federation of Independent Business. 'Optimism on Main Street continues to rise with the enhanced economic outlook following the US presidential election,' said NFIB Chief Economist Bill Dunkelberg.
He elaborated, 'Expectations for economic growth, eased inflation, and favorable business conditions have surged, reflecting anticipations of pro-business policies and legislation in the forthcoming year.' Market reactions included a 2.9 basis point decrease in the US two-year yield, settling at 4.37%, while the 10-year rate witnessed a slight decline of one basis point to 4.8%.
In corporate developments, Celanese shares surged by 5.6%, making it the top gainer on the S&P 500, following a stock upgrade to 'buy' from BofA Securities. Additionally, Constellation Energy performed admirably, climbing 4.6% as UBS and Jefferies elevated their price targets for the stock. Conversely, Eli Lilly saw a significant drop of 7.4%, the worst performer on the S&P 500, due to lowered fourth-quarter and full-year revenue forecasts amidst underwhelming growth in its US incretin division.
Boeing also faced a notable decline, down 2%, after reporting reduced deliveries and orders for the fourth quarter and full year compared to the previous year. In commodities, West Texas Intermediate crude oil experienced a 1.5% decrease, trading at $77.68 per barrel. Meanwhile, precious metals saw gains, with gold rising 0.1% to $2,682.80 per troy ounce and silver increasing by 0.3% to $30.4 per ounce.
The stock tickers relevant to today’s trading include $US30, $US500, $CE, $CEG, $LLY, and $BA..