Ignacio Teson•Wednesday, February 12, 2025•2 min read
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U.S. markets ended the day mixed on Wednesday following a rebound in inflation and remarks from Federal Reserve Chairman Jerome Powell.
The Dow Jones Industrial Average fell 0.50% to 44,368.56 points, while the broader S&P 500 declined 0.27% to 6,051.97 points. Meanwhile, the Nasdaq Composite inched up 0.03% to 19,649.95 points.
SPX
Inflation Data and Fed’s Stance
The U.S. Consumer Price Index (CPI) rose 0.5% in January, following a 0.4% increase in December. On a year-over-year basis, CPI climbed 3.0%, up from 2.9% in December, exceeding analyst expectations of 0.3% monthly and 2.9% annually.
Before the inflation data was released, former U.S. President Donald Trump renewed his calls for the Federal Reserve to cut interest rates. However, Fed Chair Jerome Powell reiterated in his testimony that there is no urgency to lower rates.
Market Sentiment and Sector Performance
Investors remain focused on monetary policy signals, watching for clues about when the Fed might resume rate cuts. Meanwhile, concerns persist over a tougher trade policy, with tariffs potentially driving inflation higher.
Among sectors, energy (-2.69%) and real estate led the declines, while consumer staples (+0.23%) and communications (+0.23%) were the only gainers. Within the Dow Jones, Caterpillar (-2.81%) and Home Depot (-2.21%) recorded notable losses.
The Oil Market
Global oil prices fell on Wednesday as potential peace talks regarding the Ukraine war raised the possibility of Russia’s return to the market, alongside expectations of a new record in U.S. production.
In London, Brent crude for April delivery dropped 2.36%, settling at $75.18 per barrel. Meanwhile, in New York, West Texas Intermediate (WTI) for March delivery fell 2.66%, closing at $71.37 per barrel.
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
www.fxleaders.com