Dow surges 700 points, S&P 500 posts best day since November after tame inflation report: Live updates

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Stocks surged Wednesday after the latest consumer price index report showed core inflation unexpectedly slowed in December and major U.S. banks kicked off quarterly earnings reporting season with blowout results.

The Dow Jones Industrial Average advanced 703.27 points, or 1.65%, to close at 43,221.55. The S&P 500 climbed 1.83% to 5,949.91, and the Nasdaq Composite rallied 2.45% to 19,511.23. It was the best day for all three major averages since Nov. 6.

December’s consumer price index showed that core inflation, which excludes food and energy, rose 3.2%, the Bureau of Labor Statistics reported Wednesday. This was a notch down from the previous month and lower than the 3.3% estimated by economists surveyed by Dow Jones. Headline inflation increased 2.9% on a 12-month basis, in line with forecasts.

“The market [is] breathing a sigh of relief as back-to-back inflation gauges, PPI yesterday and CPI this morning, came in slightly below expectations,” said John Kerschner, head of U.S. securitized products and portfolio manager at Janus Henderson Investors. “Perhaps most importantly, today’s CPI number takes additional rate hikes off the table, which some market participants were beginning to prematurely price in.”

The 10-year Treasury yield sharply dropped on the back of the CPI report and was last down roughly 13 basis points at about 4.65%. Growth stocks such as Tesla and Nvidia popped around 8% and 3%, respectively, as Treasury yields dove.

Fourth-quarter earnings reporting got off to a positive start Wednesday, with big banks managing to broadly top the Street’s expectations. JPMorgan Chase shares rose nearly 2% after the bank reported an EPS and revenue beat, which was driven by strong fixed-income trading and investment banking results.

Shares of Goldman Sachs popped 6% after the bank posted a top- and bottom-line beat in the previous quarter, and Wells Fargo shares jumped more than 6% after the bank said net interest income would be 1% to 3% higher in 2025. Citigroup shares gained 6% after the company beat fourth-quarter estimates.

“We got a good start today to earnings season. The bank earnings are key because the financial sector is so tied to the general economy. So for these big banks to put up bullish numbers today, I think it does bode well,” said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report.

Stocks finish higher Wednesday

U.S. stocks ended in the green Wednesday.

The Dow Jones Industrial Average jumped 703.27 points, or 1.65%. The S&P 500 climbed 1.83%, while the Nasdaq Composite advanced 2.45%.

— Hakyung Kim

FTAI Aviation plunges as much as 40% on bearish Muddy Waters short report

Shares of high-flying FTAI Aviation, which was up 210% in 2024 and 171% in 2023, plunged as much as 40% on Wednesday after distribution of a 64-page short report from Muddy Waters Research challenging the aircraft and jet engine leasing company’s accounting techniques.

Muddy Waters said it was short FTAI Aviation “because its financial reporting is highly misleading. We believe revenue from true maintenance and individual off-the-rack module sales are materially lower than reported. FTAI, in our view, is misleading investors by reporting one-time engine sales as Maintenance Repair & Overhaul (MRO) revenue in its Aerospace Products (AP) segment.”

FTAI lost more than $6.3 billion in market value at the session low Wednesday, when shares fell $61.92 to $91.37.

FTAI didn’t immediately respond to email requests for comment on the Muddy Waters report. New York-based FTAI is next scheduled to report financial results on Feb. 20, according to FactSet data.

— Scott Schnipper

Equities becoming more sensitive to yields, says Nationwide strategist

Growth stocks such as Tesla and other Big Tech names popped Wednesday after Treasury yields dropped on the slowdown in core inflation from December’s consumer price index report.

The pullback in yields following the CPI report is “a welcome relief following a 1.2% move in the 10-year Treasury yield since September,” said Mark Hackett, chief market strategist at Nationwide.

“Equity investors have become increasingly sensitive to moves in the bond market, with an intense focus on rates, inflation, and Fed policy,” Hackett added.

— Hakyung Kim

Quantum stocks soar Wednesday

Shares of quantum companies surged Wednesday after Microsoft called 2025 the year to get “quantum-ready.”

D-Wave Quantum and Rigetti Computing popped 34% and 27%, respectively. The Defiance Quantum & AI ETF rose around 3% on the day.

The rally was also fueled by Nvidia on Tuesday announcing a “Quantum Day” at its GTC conference in March.

Earlier this month, the quantum rally suffered a pullback after comments from Big Tech CEOs Jensen Huang and Mark Zuckerberg tempered expectations on the technology, suggesting that useful quantum computers remain decades on the horizon.

— Hakyung Kim, Samantha Subin

Economic growth, inflation tick higher, Fed ‘Beige Book’ shows

Economic activity ticked up over the past seven weeks, as did hiring and prices, according to an update Wednesday from the Federal Reserve.

The Fed’s “Beige Book” characterized growth as up “slightly to moderately” across its 12 districts as consumer spending and vehicle sales picked up while construction pulled back due to higher costs for materials and financing.

On the labor market, the report said half the Fed districts saw a “slight increase” in hiring while the rest were flat. Wage growth also moved at a “moderate” pace.

Turning to inflation, prices rose “modestly overall” with pullbacks noted in retail and manufacturing.

—Jeff Cox

Oil hits August highs

Oil prices touched levels not seen since August, providing upward momentum to energy stocks.

West Texas Intermediate crude hit $80.04 at session highs, marking its most expensive level since Aug. 13. Brent crude futures rose as high as $81.90, a level last reached on Aug. 12.

Energy stocks rallied in tandem. The Energy Select Sector SPDR Fund (XLE) climbed 1.3%, putting it on track for its sixth straight positive session.

— Alex Harring

Volatility expected to continue ‘in the coming weeks and months,’ UBS says

The bumpy ride for stocks in 2025 may not be over yet, according to UBS.

“We expect stock volatility to persist in the coming weeks and months as investors react to incoming data and Trump 2.0 policy news amid rate uncertainty,” the firm wrote in a Wednesday note to clients, noting that the S&P 500 is 1% higher than where it was before President-elect Donald Trump won November’s election. That’s with the broad market index having given up gains of more than 4% in recent weeks as economic data has come in stronger than expected.

That said, UBS thinks that the turbulent start to the new trading year has “not been caused by any fundamentally negative economic news.” Meanwhile, it expects the Federal Reserve to lower interest rates by another 50 basis points later this year.

“The underlying trends remain favorable for equities,” the firm also wrote.

— Sean Conlon

Communication services leads Wednesday’s gains

The communication services sector jumped 2.7% on Wednesday, leading the S&P 500 higher.

Consumer discretionary, financials and information technology each popped 2% and more.

The only sector in the red on the day was consumer staples, which was down just 0.04%.

— Hakyung Kim

Oil and gas ETF higher Wednesday

The SPDR S&P Oil & Gas Exploration & Production ETF rose Wednesday and headed toward its sixth straight gain and its 15th positive session out of the last 16.

If the oil and gas ETF closes higher Wednesday, it will be the first time since 2006 that it has gained in 15 of 16 sessions. The XOP closed Tuesday above its 200-day moving average for the first time since early December 2024.

Stocks leading the gains include Crescent Energy, Chord Energy and Comstock Resources, which are all up by more than 1.5%.

— Hakyung Kim, Nick Wells

See the stocks making midday moves

Some names are making big moves in midday trading:

• Quantum stocks – Quantum computing stocks gained after Microsoft unveiled its quantum-ready plan aimed at preparing businesses for the rise of quantum computers. Nvidia also announced a quantum day at its annual GTC conference. Rigetti Computing rallied more than 18%, while D-Wave Quantum surged nearly 20%. IonQ skyrocketed 33%.
• Beacon Roofing Supply – Shares of the specialty building products distributor jumped more than 10%, hitting a new 52-week high, after QXO announced that it has proposed to acquire the company for $124.25 per share in cash. That implies a total transaction value of $11 billion. Meanwhile, shares of QXO fell about 2% following the announcement.
• Wells Fargo – Shares of the San Francisco-based lender jumped nearly 6% after the bank posted better-than-expected adjusted earnings and issued strong guidance on net interest income for 2025. The San Francisco-based lender said it expects 2025 net interest income, a key measure of what a bank makes on loans, to be 1% to 3% higher than 2024′s number of $47.7 billion.

Read here for the full list.

— Sean Conlon

Israel and Hamas reach ceasefire and hostage deal, NBC News says

Israel and Hamas reached a ceasefire and hostage deal, NBC News reported, a potentially positive catalyst for risk markets as it removes a lingering sentiment headwind.

More importantly, the deal marks a breakthrough in the 15-month war that has inflamed tensions across the Middle East. It also comes ahead of President-elect Donald Trump’s inauguration.

— Natasha Turak, Fred Imbert

Chip stocks climb Wednesday

Semiconductor stocks advanced Wednesday, as growth stocks broadly popped on the downturn in yields after the latest consumer price index report showed core inflation slowing in December.

The VanEck Semiconductor ETF rose 1.6% on the day. Chipmaking giant Nvidia popped 1.5%, and Qualcomm jumped 2.7%. U.S.-traded shares of TSMC gained 1.4%.

— Hakyung Kim

Major indexes head for best day since postelection rally

The three major indexes are on pace to notch their best day since the session immediately following November’s presidential election.

The Nasdaq Composite has jumped more than 2%, while the Dow and S&P 500 gained 1.5% and 1.6%, respectively. If those moves hold, Wednesday would the best day for each since Nov. 6, when the market rallied after Donald Trump emerged as the winner of the presidential election.

Wednesday’s gains came after the consumer price index report showed core inflation came in slightly lower than economists expected.

— Alex Harring

Bank of New York Mellon rises after earnings beat

Bank of New York Mellon is another financial stock climbing after earnings Wednesday.

The bank reported $1.72 in adjusted earnings per share on $4.85 billion of revenue. Analysts surveyed by LSEG were expecting $1.56 per share and $4.66 billion in revenue. Shares rose 6%.

BNY Mellon said total fee revenue rose 9% year over year, while net interest income climbed 8%. Noninterest expense fell 16% from a year ago.

— Jesse Pound

Dollar weakens following CPI release

The U.S. dollar fell Wednesday after December’s consumer price index report showed core inflation rose rose less than expected.

The dollar index was last down 0.4% at 108.7.

Against the yen, the greenback fell 1% to 156.41 yen. The dollar inched down 0.1% against the Euro to 1.03, and slipped 0.3% against the Korean won to 1,455.19.

— Hakyung Kim

Goldman Sachs leads Dow higher

Shares of Goldman Sachs popped about 6% on Wednesday following the investment bank’s earnings and revenue beat in the fourth quarter. It was the best-performing stock in the Dow Jones Industrial Average.

Home Depot and American Express rose more than 3% each, making them the next top outperformers in the 30-stock index.

The only stocks in the red on the day were Verizon, Honeywell and UnitedHealth Group, which were down by less than 1% each.

— Hakyung Kim

Bank ETF jump after strong earnings

Bank ETFs popped Wednesday after several of the major U.S. banks reported stronger-than-expected earnings for the fourth quarter.

The SPDR S&P Bank ETF (KBE) traded 3% higher. The SPDR S&P Regional Banking ETF (KRE) also gained around 3%. Both ETFs were headed for their third straight day of gains. KBE’s last three-day winning streak came in late November, along with KRE’s.

— Fred Imbert

Stocks rise Wednesday

U.S. stocks kicked off Wednesday’s trading session in the green.

The Dow Jones Industrial Average climbed 647 points, or 1.5%. The S&P 500 advanced 1.4%, while the Nasdaq Composite gained 1.7%.

— Hakyung Kim

Citi stock climbs after earnings beat

Citigroup beat estimates on the top and bottom lines in its fourth-quarter report, helping boost the stock 6% in premarket trading.

Here is how the company did relative to LSEG analyst consensus estimates:

• Earnings: $1.34 a share, vs. $1.22 expected
• Revenue: $19.58 billion, vs. $19.49 billion expected

Citi reported revenue growth across most of its businesses, with investment banking and fixed-income trading being two of the main highlights. The bank also announced a $20 billion stock buyback program.

— Jesse Pound

Core CPI rises less than expected year over year

Core inflation unexpectedly slowed in December, giving investors hope of Federal Reserve rate cuts later this year.

The so-called core consumer price index, which strips out volatile food and energy prices, rose 3.2% in December year over year. Economists polled by Dow Jones expected a gain of 3.3%. Overall CPI increased 2.9% year on year, in line with expectations.

— Fred Imbert

Wells Fargo ups Lululemon price target

Wells Fargo says Lululemon is one of its favored ways to play a mixed retail sector.

The firm increased its price target on the athleisure stock to $375 per share from $350, equating to about 4% downside from Tuesday’s $388.74 close. Wells Fargo reiterated its equal weight rating on Lululemon stock.

“Our view is simply that the playing field isn’t level anymore. Some companies are struggling to some degree with unique brand/business model pressures, some are in the early-to-middle innings of solid turnaround efforts, some have just hired new leadership and are beginning turnarounds, while some have actually been resoundingly successful and are in a great financial position go-fwd, in our view,” analyst Ike Boruchow wrote in a Wednesday note.

“We still see many compelling long ideas in the space, and remain selective in our approach,” he added.

— Brian Evans

Goldman Sachs rises on strong fourth-quarter results

Goldman Sachs shares advanced 1.8% Wednesday after the investment bank posted an earnings and revenue beat in the fourth quarter.

The bank reported $11.95 earnings per share on $13.87 billion in revenue. Analysts surveyed by LSEG forecast earnings of $8.22 per share on revenue of $12.39 billion.

Stronger-than-expected trading revenue in the prior period helped boost the company’s results.

— Hakyung Kim, Hugh Son

Wells Fargo climbs on earnings beat, strong guidance

Wells Fargo reported fourth-quarter earnings that beat the Street’s expectations, sending shares higher by around 3%.

The company earned an adjusted $1.42 per share, beating an LSEG forecast of $1.35 per share. Wells also said it expects net interest income to increase 1%-3% in 2025 from the year-earlier period.

— Fred Imbert

JPMorgan Chase rises after earnings beat

JPMorgan Chase shares were up more than 2% in the premarket after the banking giant reported fourth-quarter results that beat analyst expectations thanks to strong performances from its fixed income and investment banking businesses.

The company earned $4.81 per share on revenue of $43.74 billion. Analysts polled by LSEG expected a profit of $4.11 per share on revenue of $41.73 billion.

— Fred Imbert

BlackRock pops on stronger-than-expected earnings

BlackRock shares were up more than 3% in the premarket after the world’s largest asset manager reported fourth-quarter results that beat expectations.

The company earned $11.93 per share on revenue of $5.68 billion. Analysts expected a profit of $11.19 per share on revenue of $5.68 billion.

Assets under management ballooned to $11.551 trillion from $11.475 trillion quarter over quarter.

— Fred Imbert

Seven of 11 sectors ended Tuesday higher

Seven of the 11 GICS sector ended Tuesday’s trading session higher.

Utilities, with a 1.3% gain, was the session’s leader, while communication services was the laggard and lost 0.97%. The materials, real estate and healthcare sectors closed more than 10% of their 52-week highs.

— Lisa Kailai Han, Christopher Hayes

SEC sues Elon Musk for alleged failure to properly disclose Twitter ownership

The SEC filed a lawsuit against Elon Musk on Tuesday, alleging that the billionaire violated securities law in 2022 by acquiring Twitter shares at “artificially low prices.”

Musk bought Twitter in 2022 for $44 billion. Before acquiring the company he held a position in Twitter of greater than 5%, which would have required public disclosure. However, the SEC complaint said that Musk didn’t properly follow disclosure rules, “allowing him to underpay by at least $150 million for shares he purchased after his financial beneficial ownership report was due.”

Read the developing story and allegations here.

— Ari Levy, Lisa Kailai Han

Bank stocks rally as investors await earnings

Bank stocks took a leg up on Tuesday as investors readied for a bevy of earnings from companies in the sector this week.

The SPDR S&P Regional Banking ETF (KRE) and the SPDR S&P Bank ETF (KBE) each popped more than 3% in the session. Both posted their best day since November.

With those gains, the KRE and KBE have risen nearly 5% and about 4.5%, respectively, since the week began.

Large banks kick off the new earnings season this week, with Goldman Sachs, JPMorgan Chase, Citigroup, and Wells Fargo all slated to report on Wednesday. Bank of America and Morgan Stanley are expected to follow on Thursday.

— Alex Harring

Stock futures open slightly higher

Stock futures traded slightly higher on Tuesday night.

Futures tied to the Dow Jones Industrial Average rose 54 points, or 0.1%. S&P 500 futures and Nasdaq 100 futures climbed 0.1% and 0.3%, respectively.

— Lisa Kailai Han