Major United States benchmark averages rallied on Wednesday (Thursday AEDT) following a report that showed core inflation eased more than expected in December. Major banks also delivered strong earnings, further lifting investor sentiment.
The Dow Jones Industrial Average surged 703.3 points or 1.7%, to close at 43,221.6. The S&P 500 climbed 1.8% to finish at 5,949.9, marking its best day since November. Meanwhile, the Nasdaq Composite led gains, rallying 2.5% to 19,511.2.
The Bureau of Labor Statistics reported that core inflation, which excludes volatile food and energy prices, rose by 3.2% year-over-year in December, slightly below the 3.3% expected by economists. Overall inflation increased by 2.9% on a 12-month basis, meeting forecasts.
The lower inflation print boosted growth stocks, with Tesla and Nvidia climbing 8% and 3.4%, respectively.
Maenwhile, the fourth-quarter earnings season began on a high note, with major U.S. banks delivering robust results.
JPMorgan Chase rose 2% after reporting better-than-expected earnings per share and revenue, driven by strong fixed-income trading and investment banking.
Goldman Sachs surged 6% following a solid beat on both earnings and revenue.
Wells Fargo also jumped 6.7% after forecasting a 1% - 3% increase in net interest income for 2025.
Citigroup followed suit, gaining 6.5% after results surpassed fourth-quarter expectations.
On the bond markets, 10-year and 2-year yields fell 2.9% and 2.3% to 4.655% and 4.268%, respectively.
