Global stock indexes experienced gains, and U.S. 10-year Treasury yields saw a slight increase on Wednesday as investors eagerly awaited the U.S. consumer price report for potential insights into the Federal Reserve’s stance on interest rates. In a late-day development, the U.S. Securities and Exchange Commission (SEC) granted approval for the first U.S.-listed exchange-traded funds (ETFs) to track bitcoin, further impacting financial markets.
The approval of Bitcoin ETFs had been anticipated, contributing to Bitcoin’s recent sharp gains. Investors are now shifting their focus to the December consumer price index report scheduled for Thursday, expecting to see a 0.2% rise in headline inflation for the month and a 3.2% increase on an annual basis.
Market participants are also eagerly awaiting U.S. company quarterly results, set to kick off with reports from major U.S. banks on Friday. Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York, noted the ongoing speculation about potential Fed rate cuts, emphasizing the importance of monitoring inflation trends.
The Dow Jones Industrial Average rose 0.45% to 37,695.73, the S&P 500 gained 0.57% to 4,783.45, and the Nasdaq Composite added 0.75% to 14,969.65. In Europe, the pan-European STOXX 600 index lost 0.18%, while MSCI’s global stocks gauge gained 0.37%.
Global markets had surged at the end of 2023 as inflation cooled faster than expected, and central banks signaled a more accommodative stance, prompting investor bets on significant rate cuts in the coming year.
The benchmark 10-year Treasury yield rose to 4.034%, while the dollar index dipped 0.14% to 102.36 by late afternoon. Soft economic data in Japan raised doubts about the Bank of Japan raising rates from negative territory this month.
Oil prices declined after an unexpected increase in U.S. crude stockpiles, with U.S. West Texas Intermediate crude settling at $71.37 a barrel, down 1.2%, and Brent crude settling at $76.80, down 1%. Spot gold dropped 0.3% to $2,024.29 an ounce amidst these market movements.
