United States indices finished in a mixed fashion on Tuesday (Wednesday AEDT) as fresh U.S. inflation data producer price index data came in lower than expected.
The Dow Jones Industrial Average climbed 221.1 points or 0.5% to 42,518.3, the S&P 500 added 6.7 points or 0.1% to 5,842.9, while the Nasdaq Composite, heavily weighted with technology stocks, fell 43.7 points or 0.2% to 19,044.4.
Major technology players faced continued selling pressure, with Nvidia losing 1.1% and Meta Platforms falling 2.3%.
Conversely, sectors like utilities, industrials, and financials saw gains as investors sought diversification.
Among data releases, the producer price index (PPI) - a key measure of wholesale inflation - rose 0.2% in December, below the 0.3% forecast by economists.
The core PPI, which excludes the more volatile food and energy categories, remained flat.
Market participants are now turning their focus to Wednesday’s consumer price index (CPI) report to assess the Federal Reserve’s progress in curbing inflation towards its 2% target. Economists are predicting a 0.3% increase in headline CPI for December.
Meanwhile, Fed funds futures indicate an almost certain expectation that the Federal Reserve will maintain its current interest rates at its upcoming meeting later this month. The CME FedWatch Tool places the probability of rates remaining within the 4.25% - 4.5% range in March at 79.8%.
In earnings developments, major U.S. banks are set to begin reporting fourth-quarter results this week. JPMorgan Chase, Citigroup, Goldman Sachs, and Wells Fargo will release their earnings later in the session, with Morgan Stanley and Bank of America to follow later in the week.
On the bond markets, the 10-year Treasury yield held steady near two-year highs at 4.788%, while the 2-year yield slipped by 0.6% to 4.365%.