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US stocks moved higher in afternoon trading on Wednesday as investors weighed fresh consumer inflation data that looked to keep the Federal Reserve on pace for another rate cut next month.
The Dow Jones Industrial Average (^DJI) jumped around 0.4%, coming off a steep slide after stocks closed lower across the board. Both the benchmark S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) also rose, up about 0.3% and 0.2%, respectively.
Meanwhile, bitcoin (BTC-USD) prices continued their move to the upside, climbing roughly 5% to trade above $92,000 a coin.
Consumer prices rose largely as forecast in October, with the Consumer Price Index rising 2.6% year over year and 0.2% on a month-over-month basis, both meeting forecasts. Rises in "core" inflation — of 3.3% year over year and 0.3% month over month — also met estimates.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
Inflation has taken center stage again after the post-election rip higher hit a wall. The FOMO market lost some mojo Tuesday as it ponders whether President-elect Donald Trump's policies could boost inflation as well as the economy. That has helped push Treasury yields higher, promising higher borrowing costs all around.
The report appears to keep the Federal Reserve on track for a December rate cut. Minneapolis Fed president Neel Kashkari told Yahoo Finance that inflation data was the key focus for the central bank in the weeks ahead, saying at Yahoo Finance’s Invest conference that any surprise to the upside "might give us pause."
According to the CME FedWatch tool, 80% of traders expect a rate cut in December.
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Bitcoin briefly tops $93,000
Bitcoin (BTC-USD) touched new milestone on Wednesday — topping a record $93,000 before paring gains.
The cryptocurrency has been at the center of the 'Trump trade' following Donald Trump's White House win last week. Bitcoin has surged more than 30% since the election, frequently touching new daily records.
Other cryptocurrencies also rose including Ethereum (ETH-USD), Solana (SOL-USD) and even meme coin Doge (DOGE-US).
Investors have flocked to bitcoin and other coins under the presumption that Trump will follow through with his pro-crypto campaign promises.
As Yahoo Finance's Josh Schafer points out, the President-elect has suggested appointing a crypto Presidential Advisory Council, firing SEC Chair Gary Gensler, and creating a "strategic national bitcoin stockpile."
Top trenders: Tesla, Rivian, Spirit
Here are some of the top trending tickers on the Yahoo Finance homepage:
Tesla (TSLA): Shares erased earlier gains after initially climbing on the announcement that CEO Elon Musk, along with conservative activist Vivek Ramaswamy, will head up a new Department of Government Efficiency, or DOGE for short. The stock, which fell 6% on Tuesday, has experienced a stellar rally in recent weeks. Shares are up over 30% since the start of the year.
Rivian (RIVN): The stock jumped by double digits after Volkswagen raised its investment in the rival electric carmaker to $5.8 billion. Shares remain under pressure on a year-to-date basis, however — down about 50%.
Spirit Airlines (SAVE): As Ines Ferré reports, the airliner plunged as much as 64% early Wednesday, the most on record, as it explores a deal with creditors to restructure its debt amid a reported threat of bankruptcy after merger talks with Frontier (ULCC) collapsed.
Cava (CAVA): Shares surged on Wednesday, climbing as much as 17% after the fast-casual Mediterranean chain reported third-quarter earnings that beat on both the top and bottom lines. Same-store sales growth, which increased by 18% year-over-year in the quarter, also came in ahead of expectations.
The company lifted its full-year same-store sales forecast as it expects to open more stores than previously guided. Cava said it now expects same-store sales to grow by 12% to 13%, up from the previous 8.5% to 9.5%
Food inflation still sticky
Yahoo Finance's Brooke DiPalma reports:
Food inflation remained sticky in October as select items drove prices higher.
The cost of groceries climbed 1.1% compared to a year ago, per data from the Bureau of Labor Statistics, and 0.1% compared to September. The overall food category increased 2.1%, driven higher by the cost to dine out, which was up 3.8%. The growth in prices of restaurant meals has outpaced the growth in grocery prices in 2024 as rising wages continue to contribute to costs.
Overall, the Consumer Price Index (CPI) increased 2.6% over the prior year in October.
"During the pandemic, we had a tremendous amount of acceleration, and that's essentially fully back to sort of where it was prior to the pandemic," BLS economist Steve Reed said of grocery prices.
Egg prices, which are historically volatile, contributed to the stubborn grocery inflation. The item saw a 30.4% year-over-year increase but a 6.4% decline month over month, the largest since April.
Prices of oranges, including tangerines, also boosted overall food prices. The fruit has been affected by drought, extremely high temperatures caused in part by the El Niño climate pattern, and citrus greening, a bacterial disease. Production in Brazil is down 9% year over year, per the US Department of Agriculture.
Inflation progress 'a slow grind' as outlook remains uncertain
New inflation data out Wednesday showed consumer prices rose as forecast in October, keeping the Federal Reserve on track to lower interest rates again in December.
"There is progress on inflation," Claudia Sahm, chief economist at New Century Advisors, told Yahoo Finance following the data's release. "We are pointed in the right direction, but it has been a slow grind. And this is another month that fits in that slow grind."
The outlook remains uncertain as economists warn of another potential inflation resurgence following the election of Donald Trump as the nation's next president.
Trump and his proposed policies have been viewed as potentially more inflationary due to the president-elect's campaign promises of high tariffs on imported goods, tax cuts for corporations, and curbs on immigration.
Immediately following Wednesday's release, markets continued to price in another 25 basis point rate cut in December after the central bank cut rates by that amount last week. Traders currently see a more than 80% chance the Fed cuts rates by 0.25% next month, up from just under 60% on Tuesday, according to data from CME's FedWatch Tool.
"It is clear that the Federal Reserve’s job is still unfinished and that markets are correct in repricing federal funds rate expectations going forward," Raymond James' chief economist Eugenio Alemán wrote in a note to clients following the report.
"Under this environment, it is only oil and gasoline prices that are keeping inflation contained. That is, any surge in oil and gas prices could severely compromise the Fed’s inflation target. The Fed should be particularly concerned about the services less energy component of CPI."
Stocks open higher after inflation data
US stocks moved to the upside in early trading on Wednesday as investors weighed fresh consumer inflation data that met economist forecasts as the central bank debates another rate cut next month.
The Dow Jones Industrial Average (^DJI) opened about 0.2% higher, coming off a steep slide as stocks closed lower across the board. Both the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) rose roughly 0.1%.
Inflation holds steady in October
A closely watched report on US inflation showed consumer price increases remained consistent during the month of October, according to the latest data from the Bureau of Labor Statistics released Wednesday morning.
The Consumer Price Index (CPI) increased 2.6% over the prior year in October, a slight uptick from September's 2.4% annual gain in prices. The yearly increase matched economist expectations.
The index rose 0.2% over the previous month, matching the increase seen in September and also on par with economists' estimates.
On a "core" basis, which strips out the more volatile costs of food and gas, prices in October climbed 0.3% over the prior month, matching September, and 3.3% over last year for the third consecutive month.
Good morning. Here's what's happening today.
Here’s a look at today’s key economic and market themes: Wall Street awaits fresh consumer inflation data, while Spirit Airlines (SAVE) plummets 70% amid looming bankruptcy concerns. US mortgage rates continue their post-election climb following Donald Trump’s victory. Meanwhile, SoftBank Group (SFTBY) plans to build a supercomputer using Nvidia’s (NVDA) new Blackwell chips, underscoring its ambitions in AI.
Economic data: MBA Mortgage Applications, (week ending Nov. 8); Consumer Price Index, October; Real average hourly earnings, October
Earnings: Cisco (CSCO)
Here are some of the biggest stories you may have missed overnight and early this morning:
Kashkari: Inflation surprise could prompt Fed 'pause'
Stocks have 'room to run' but that doesn't mean buy: Bridgewater CIO
Inflation 'unlikely to show much progress' in October
Spotify forecasts profit above estimates, stock jumps
US mortgage rates rose again in week after Trump's victory
