U.S. stocks traded mixed in early trading on 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 only about 0.1%, coming off a steep decline as stocks closed lower across the board. Both the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) fell into the red after initially rising earlier in the session, down about 0.1% and 0.3%, respectively.
Consumer prices rose largely as forecast in October, with the Consumer Price Index rising 2.6% year-on-year and 0.2% month-on-month, both meeting expectations. The increase in ‘core’ inflation – of 3.3% year-on-year and 0.3% month-on-month – also met expectations.
Inflation is back in focus after the post-election crack hit a wall. The FOMO market lost some mojo on Tuesday as it wondered whether President-elect Donald Trump’s policies could boost both inflation and the economy. That has helped push government bond yields higher, promising higher financing costs everywhere.
The report appears to keep the Federal Reserve on track for a rate cut in December. Minneapolis Fed President Neel Kashkari told Yahoo Finance that inflation data will be the main focus for the central bank in the coming weeks, saying at Yahoo Finance’s Invest conference that any positive surprise “could give us pause” .
According to the CME FedWatch tool, 80% of traders expect a rate cut in December.
Meanwhile, Trump has appointed Tesla ( TSLA ) CEO Elon Musk to co-lead a new government Department of Efficiency — another challenge for analysts trying to assess the EV maker’s prospects. The new president’s cabinet choices are also being closely watched for their impact on his policies and the economy, even though DOGE is not a government agency.
Shares of Tesla have erased earlier gains as the stock tries to stage a comeback on Tuesday after falling 6%. Meanwhile, shares of Rivian (RIVN) rose double digits after Volkswagen increased its investment in the rival electric carmaker to $5.8 billion.
Read more: What the Fed’s interest rate cut means for bank accounts, CDs, loans and credit cards
