US stocks rise after in-line CPI cements Fed rate cut next week

US stocks rose Wednesday, boosted by the release of consumer inflation data which has largely cemented a Federal Reserve interest rate cut next week. 

At 09:45 ET (14:45 GMT), the Dow Jones Industrial Average gained 30 points, or 0.1%, the S&P 500 index gained 40 points, or 0.6%, and the NASDAQ Composite rose 235 points, or 1.2%.  CPI data eyed for more rate cues 

US consumer prices increased slightly on an annualized basis in November, but the figure came in as widely expected, with the lack of an upside surprise not offering up an excuse for the Federal Reserve to delay cutting interest rates next week.

The Labor Department's consumer price index  (CPI) rose by 2.7% last month, accelerating slightly from 2.6% in October, while stripping out more volatile items like food and fuel, the "core" number climbed by 3.3% in the twelve months to July, also in line with expectations.

The Federal Reserve has cut interest rates by 75 basis points since September, and markets are widely expecting another 25-bps cut at the December 17-18 meeting. But several Fed officials have called for a more cautious approach to future easing, citing concerns over sticky inflation and resilience in the U.S. economy. 

Investors are also seeking more cues on what President-elect Donald Trump’s policies will entail for inflation and the economy, with his plans for increased trade tariffs expected to increase price pressures.  Adobe results due 

On the corporate earnings front, Adobe Systems (NASDAQ:ADBE ) will release its results after the bell, while Google owner Alphabet (NASDAQ:GOOGL ) rose 2.3%, continuing the previous session's sharp gains after the tech giant announced a new breakthrough in quantum computing, which could herald a sharp increase in computing speeds.

Additionally, Dave & Buster’s Entertainment (NASDAQ:PLAY ) stock slumped 16% after the Dallas-based arcade and restaurant chain announced the exit of CEO Chris Morris and reported disappointing third-quarter results.

Macy’s (NYSE:M ) stock fell 10% after the department store chain cut its annual profit forecast, as it struggles with weak demand during the holiday shopping season.   Crude looks for Chinese boost 

Crude prices rose Wednesday, with traders looking for more economic stimulus from China, the world's largest crude importer. 

By 09:45 ET, the US crude futures (WTI) gained 1.1% to $69.33 a barrel, while the Brent contract rose 0.9% to $72.86 a barrel.

Chinese authorities have pledged to enact more targeted stimulus measures to boost economic growth, ramping up hope that oil demand will recover. 

Trade data also showed a sharp increase in Chinese oil imports through November - the first annual growth in seven months. 

These gains continued despite the Organization of Petroleum Exporting Countries cutting its demand forecasts for both 2024 and 2025. 

Additionally, industry data, released Tuesday, showed that US oil inventories  unexpectedly grew in the week to Dec. 6, raising concerns that demand will dwindle further in the winter season.

Official data, from the Energy Information Administration , is due later on Wednesday. 

(Ambar Warrick contributed to this article.)

Source: Investing.com