Wall Street’s Mixed Finish Following an Inflation Update in the U.S. Stock Market Today

Following the release of the most recent inflation data, which raised expectations that interest rate cuts would provide additional economic support next month, U.S. markets ended the day neutral on Wednesday.

Almost unchanged, the S&P 500 gained less than 0.1% after suffering its first loss since a massive rally that broke out following Election Day last week. A 0.1% increase in the Dow Jones Industrial Average and a 0.3% decline in the Nasdaq composite were observed.

It increased from 2.4% to 2.6%, while “core inflation,” an underlying metric, did not. Economists say such core inflation can be a stronger indicator of future developments, and the as-expected figure increased anticipation that the Federal Reserve would assist. 

In September, after getting inflation almost down to its objective of 2%, the Fed started lowering interest rates from their two-decade high to support the job market and keep it vibrant. According to CME Group data, it made another cut earlier this month, and traders now estimate an improved probability of about 80% for a third cut at its meeting next month.

The stock of Spirit Airlines dropped 59.3%.  In a regulatory statement, the airline stated that it is still attempting to reach an agreement to renegotiate the repayment of its debt. The airline claimed that if an agreement could be reached, it could protect consumers and staff while also eradicating the company’s owners.

After Japan’s wholesale inflation rate hit its highest level since July of last year, the Nikkei 225 slumped 1.7% on international financial markets. After Samsung Electronics’ stock dropped to its lowest level in more than four years, South Korea’s Kospi slumped 2.6%. Bitcoin surged beyond $93,000 in the cryptocurrency market as a whole, but in afternoon trade it fell down below $90,000. Trump has embraced cryptocurrencies and promised to turn his nation into the global center of cryptocurrency.

What Does Trump’s Presidency Mean for the US Stock Market?

Up to the elections on November 5, the US stock market has been optimistic in 2024, with major indices including the Dow, S&P, and Nasdaq 100 setting new records. When it became evident after the election that Donald Trump would be the next president, bullish sentiments were further stoked, and US stocks all rose sharply. 

With S&P 500 businesses reporting an 8.4% profit increase, corporate profits are predicted to have a substantial impact on US stocks as market attention shifts back to economic development in the wake of Donald Trump’s election triumph. 

Trump’s comeback to the US presidency portends a potential increase in inflationary pressures. His economic plan calls for large investments in infrastructure and other initiatives, which could significantly boost the economy’s capital inflow and raise demand and, consequently, prices. 

The belief that “Make America Great Again” may help American companies has been reflected in the Russell 2000 index’s strong performance in the wake of the US election results. Over the past 12 months, the small-cap Russell 2000 index has experienced an incredible run. Over the past year, the index has increased by 40% while the Nasdaq 100 has been up 35%. Thus far in 2024, the index has increased by 18%.