U.S. stocks were mixed in early trading Wednesday, as investors weighed new consumer inflation data that appeared to keep the Federal Reserve on track for another rate cut next month.
The Dow Jones Industrial Average (^DJI) rose about 0.1%, following a sharp decline after stocks closed lower across the board. Both the S&P 500 (^GSPC) and the Nasdaq Composite (^IXIC) fell into the red after initially rising earlier in the session, falling about 0.1% and 0.3%, respectively.
Consumer prices rose largely as expected in October, with the consumer price index rising 2.6% year-over-year and 0.2% month-over-month, meeting both forecasts. “Core” inflation increases (3.3% year-over-year and 0.3% month-over-month) also met estimates.
Inflation has taken center stage again after the post-election surge hit a wall. The FOMO market lost some of its appeal Tuesday as it ponders whether President-elect Donald Trump’s policies could boost inflation as well as the economy. That has helped boost Treasury yields, promising higher borrowing costs everywhere.
The report appears to keep the Federal Reserve on track to cut rates in December. Minneapolis Federal Reserve President Neel Kashkari told Yahoo Finance that inflation data would be a key focus for the central bank in the coming weeks, and told Yahoo Finance’s Invest conference that any upside surprise “could make us reflect.”
According to the CME FedWatch tool, 80% of traders expect a rate cut in December.
Meanwhile, Trump named Tesla (TSLA) CEO Elon Musk to co-lead a new Department of Government Efficiency, another challenge for analysts trying to assess the electric vehicle maker’s prospects. The incoming president’s choices for his cabinet are also being closely watched for their impact on his policies and the economy, although DOGE is not a government agency.
Tesla stock erased earlier gains as the stock attempted to recover from a 6% drop on Tuesday. Meanwhile, Rivian (RIVN) shares rose double digits after Volkswagen increased its investment in the rival electric car maker to $5.8 billion.
Read more: What the Federal Reserve’s rate cut means for bank accounts, CDs, loans and credit cards
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