U.S. benchmark equity indexes exhibited mixed results Wednesday following the release of official data indicating that consumer inflation accelerated in line with Wall Street's forecasts. The U.S. consumer price index recorded a 0.3% increase in November, rising from a consistent 0.2% for the previous four months, as reported by the Bureau of Labor Statistics.
On an annual basis, inflation climbed to 2.7% from October's 2.6% rate. Both statistics aligned with expectations derived from a Bloomberg-compiled survey. TD Economics pointed out in a note that, 'The November CPI report provided further evidence that inflation progress is becoming much more incremental, suggesting the Federal Reserve's fight to return to 2% inflation is far from over.' This sentiment reflects the complexities the Federal Reserve faces in managing inflation levels. In terms of market expectations, the likelihood of a 25-basis-point reduction in interest rates next week surged to nearly 95% on Wednesday, a leap from Tuesday's 89%, as assessed by the CME FedWatch tool. In commodity markets, January West Texas Intermediate crude oil saw an uptick of $1.70, settling at $70.29 per barrel.
Additionally, February Brent crude, the international standard, was priced at $73.44, rising by $1.25, influenced by China’s recent monetary policy easing. In contrast, OPEC revised its demand forecast downward for this year and the next, following a report indicating diminishing U.S. inventories. In the technology sector, Apple is collaborating with Broadcom as it embarks on the development of its inaugural server chip tailored for artificial intelligence, according to a report by The Information citing anonymous sources.
Following this news, Broadcom's stock surged by 6.2%, while Apple experienced a slight decrease of 0.4%. The tobacco industry faced headwinds after the New York Times disclosed that the U.S. Food and Drug Administration is proposing a significant reduction in nicotine levels in cigarettes. Consequently, shares of Philip Morris International dropped nearly 2%, and Altria Group fell by 1.5%..