NEW YORK — U.S. stocks are rising Wednesday after the latest update on inflation appeared to clear the way for more help for the economy from the Federal Reserve.
The S&P 500 rose 0.6% in early trading and is on track to break its first two-day losing streak in nearly a month. The Dow Jones Industrial Average was up 70 points, or 0.2%, as of 9:35 a.m. Eastern time, and the Nasdaq composite climbed 0.9%.
Treasury yields also eased in the bond market on expectations that Wednesday’s inflation report will allow the Fed to deliver another cut to interest rates at its meeting next week.
Traders are betting on a 96% probability of that, according to data from CME Group, up from 89% a day before. If they’re correct, it would be a third straight cut by the Fed after it began lowering rates in September from a two-decade high. It’s hoping to support to a slowing job market after getting inflation nearly all the way down to its 2% target.
Lower rates would help give support to the economy, but they could also provide more fuel for inflation.
Wednesday’s report said U.S. consumers paid prices in November that were 2.7% higher than a year earlier. That’s a slight acceleration from October’s inflation rate of 2.6%, but it was exactly what economists were expecting. Another report on inflation at the wholesale level will arrive on Thursday.
“The data have given the Fed the ‘all clear’ for next week, and today’s inflation data keep a January cut in active discussion,” according to Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.
Expectations for a series of cuts to rates by the Fed have been one of the main reasons the S&P 500 has set an all-time high 57 times this year, with the latest coming last week.
On Wall Street, Stitch Fix jumped 16.3% for one of the market’s bigger gains after the company that sends clothes to your door reported a smaller loss for the latest quarter than analysts expected. It also gave financial forecasts for the current quarter that were better than expected, including for revenue.
Albertsons rose 2.3% after filing a lawsuit against Kroger, saying it didn’t do enough for their proposed $24.6 billion merger agreement to win approval from federal regulators. Kroger added 0.4%.
A day earlier, judges in separate cases in Oregon and Washington nixed the supermarket giants’ merger. The grocers contend a combination could help them compete with big retailers like Walmart, Costco and Amazon, but critics said it would hurt competition.
On the losing end of Wall Street, Macy’s fell 10.7% after cutting some of its financial forecasts for the full year of 2024, including for how much profit it expects to make off each $1 of revenue.
Dave & Buster’s Entertainment sank 16.2% after reporting a worse loss for the latest quarter than expected. It also said CEO Chris Morris has resigned, and the board has been working with an executive-search firm for the last few months to find its next permanent leader.
In the bond market, the yield on the 10-year Treasury eased to 4.20% from 4.23% late Tuesday. The two-year Treasury yield, which more closely tracks expectations for the Fed, fell to 4.10% from 4.14%.
In stock markets abroad, indexes were higher across much of Europe and Asia.
Hong Kong’s Hang Seng was an outlier and slipped 0.8% as Chinese leaders convened an annual planning meeting in Beijing that is expected to set economic policies and growth targets for the coming year.
South Korea’s Kospi rose 1%, up for a second straight day as it climbs back following last week’s political turmoil.
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AP Writers Matt Ott and Zimo Zhong contributed.
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