US Stocks Rattled amid High Inflation, Start of Earnings Season

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Key Takeaways

• Stocks on Wall Street finish mixed, Dow Jones flat, while S&P500 snaps a losing streak
• Inflation in September reaches 5.4%, up from 5.3% a month earlier

What’s on Focus in the Markets?

Wall Street stocks struggled to perform on Wednesday as a cocktail of threats and challenges has dampened the market mood. The three main indexes in the US swung between gains and losses during the session. Ultimately, however, stocks finished flat to slightly positive.

The S&P500 snapped a three-day losing streak as the benchmark gained 0.3% in a choppy trading session. The Dow Jones Industrial Average finished virtually flat, while the Nasdaq Composite advanced 0.7%.

In the broader financial markets, the EUR/USD climbed half a percent to 1.1600, along with the rising price of gold. Moreover, the US dollar declined across the board as traders digested the latest US inflation report. Gold, on the other hand, jumped nearly 2.2% to settle around $1,800 per troy ounce.

Oil prices, in the meantime, remain elevated and sit near their multi-year highs. Brent crude, the international oil standard, hovers right below $84 a barrel on Thursday. So too, US oil, West Texas Intermediate, gravitates toward its highs above $80 a barrel.

What’s the Latest News on Bitcoin?

The price of bitcoin on Thursday found new buying momentum. In other words, the number one digital currency pushed higher to a new monthly high in a 2.5% jump early this morning. Bitcoin briefly climbed to a session high of $58,500 a coin, a level last seen on May 10. That said, at its peak today, the orange coin hovered just about 10% away from its record high of $64,800.

In other news, the US is now the leading country in terms of bitcoin mining operations. According to data from Cambridge University, the US took the top spot from China after Beijing banned all crypto activities.

What’s New Around the Markets?

A flurry of events and economic reports have defined this week’s market sentiment. First, the US reported on Wednesday inflation for September stayed high. In more detail, consumer prices climbed to 5.4% on an annual basis, up from a 5.3% annual rate for August.

Against that backdrop, market participants, particularly stock investors, have increased their concerns the jump in prices might not be transitory.

At the same time, the earnings season officially kicked off yesterday. JPMorgan Chase, a top US investment bank, reported a profit of $11.7bn on $30.44bn in revenue.

Additionally, the Federal Reserve released its minutes from its meeting near the end of September. On that note, Fed policymakers last month indicated increased worries that inflation could go on further than anticipated.

They also reiterated their plans to start reducing the vast monetary support as soon as November. The minutes published Wednesday also revealed the US central bank aims to unwind the monthly purchases by $15bn a month. With that in mind, the Fed has been buying assets worth $120bn since the pandemic began.

Today’s Economic Calendar (EST times)

• 08:30 am, US, Initial Jobless Claims
• 08:30 am, US, PPI (MoM) (Sep)
• 11:00 am, US, Crude Oil Inventories