U.S. stocks traded mostly flat after a standout day for the markets. Major indexes had their best daily percentage gains since November 6, supported by easing inflation concerns and robust bank earnings.
Investors brushed off disappointing retail sales data and a rise in weekly unemployment claims. December retail sales increased by 0.4%, below economists’ expectations of a 0.6% rise. Weekly jobless claims climbed by 14,000 to 217,000, higher than the projected 210,000.
The S&P 500 slipped 0.21% to close at 5,937.34, while the Dow fell 0.16% to 43,153.13. The tech-heavy Nasdaq dropped 0.89% to 19,338.29. Meanwhile, the 10-year Treasury yield eased to 4.615%, following comments from Federal Reserve officials suggesting the possibility of additional rate cuts this year.
Economists adjusted their expectations for future rate cuts after a strong jobs report. Some, like Bank of America, now see the risk of a rate hike rather than further reductions.
Banking Sector Shines Amid Earnings Reports
Bank stocks extended gains thanks to solid fourth-quarter earnings. Bank of America and Morgan Stanley exceeded analysts’ forecasts, bolstered by their investment banking operations. Earlier in the week, strong results from JP Morgan, Goldman Sachs, Wells Fargo, and Citigroup lifted market sentiment.
These positive earnings reflect confidence in the economy’s ability to adjust to higher interest rates, according to Samer Hasn, senior market analyst at XS.com.
Stocks in Focus
Several stocks made notable moves:
- UnitedHealthcare: Shares declined after missing quarterly revenue expectations. This was the company’s first earnings report since the death of executive Brian Thompson.
- TSMC: Shares rose after posting a record quarter driven by AI-related demand, boosting semiconductor stocks like Nvidia and Broadcom.
- BP: The oil company edged higher as it announced plans to cut 4,700 internal and 3,000 contractor jobs to manage costs.
- Target: Shares dipped despite raising fourth-quarter sales guidance. Investors remained concerned about profit margins.
- American Express: The stock slipped slightly after the company agreed to pay $230 million in penalties for deceptive credit card and wire service practices affecting small businesses.
Treasury Nominee Faces Scrutiny
Scott Bessent, President-elect Donald Trump’s nominee for Treasury secretary, faced tough questions in the Senate. He endorsed tariffs, tax cuts, sanctions on Russian oil, and maintaining the Federal Reserve’s independence. Bessent opposed creating a central bank digital dollar, instead emphasizing reliance on the U.S. dollar.
Bitcoin Surpasses Key Level, Then Retreats
Bitcoin briefly soared past $100,000 amid speculation that Trump might consider establishing a crypto reserve. Reports suggest the reserve could include other cryptocurrencies like Solana and XRP. However, Bitcoin ended the day slightly down at $100,184.70, falling 0.25%.