US Stocks Rally After Weaker CPI Print – Nasdaq up 1.4%
US equity markets advanced overnight as softer inflation data buoyed risk sentiment. The latest CPI print came in at its lowest level since 2021, though analysts caution that recent government shutdown disruptions may have skewed the figures. All three of the major indices closed in positive territory, led by tech stocks, which rebounded from yesterday’s drop. The Dow Jones added 0.14% to finish at 47,951, while the S&P 500 climbed 0.79% to 6,774, while the Nasdaq outperformed, rising 1.38% to 23,066. US Treasury yields eased, with the 2-year down 2.1 bps to 3.462% and the 10-year slipping 3.1 bps to 4.122%, reflecting expectations for a slower pace of tightening. The US Dollar Index ended slightly firmer at 98.44, up 0.08%, after an initial post-CPI dip. The Bank of England delivered a widely anticipated 25 bps rate cut, while the European Central Bank held policy steady. Oil prices were marginally higher as traders continued to weigh supply risks heading into 2026. Brent rose 0.12% to $59.75, while WTI gained 0.23% to $56.08. Gold briefly spiked to its highest level since late October following the CPI release, but settled lower, down 0.15% at $4,331.16 at the close.
Another Busy Day to Close Out the Trading Week
It is another busy day ahead for traders, with another key central bank rate call scheduled, as well as some more tier 1 data releases later in the day. In the Asian session, attention will centre on Japanese markets, where the Bank of Japan is expected to announce its interest rate decision—a 25-basis point hike is widely priced in. This is followed by a press conference later in the day, where traders will look closely for hints of more hikes in the new year. The European session will see the release of UK Retail Sales data (exp +0.3% m/m), which will provide insight into consumer spending trends ahead of the holiday season. Early in the US session, Canada will report retail sales (exp 0.0% m/m), offering a snapshot of economic momentum north of the border. Later in the session, US data will round out the week, with Existing Home Sales (exp 4.15 mio) figures released alongside the revised University of Michigan Consumer Sentiment and Inflation Expectations data, key indicators for assessing household confidence and the inflation outlook.
