US stock futures popped on Wednesday as high hopes for bank earnings paid off, and a crucial consumer inflation update showed prices increased less than expected in December.
Dow Jones Industrial Average futures (YM=F) climbed roughly 1.5%, while S&P 500 futures (ES=F) pushed more than 1.5% higher. Contracts on the tech-heavy Nasdaq 100 (NQ=F) added almost 2% on the heels of a mixed day on Wall Street.
Stocks took a leg higher in pre-market trading as the Consumer Price Index (CPI) showed progress toward the Fed’s 2% inflation target in December. On a “core” basis, which strips out the more volatile costs of food and gas, prices in December climbed 0.2% over the prior month, a deceleration from November’s 0.3% monthly gain, and 3.2% over last year.
Prior to December’s print, core CPI had been stuck at a 3.3% annual gain for the past four months. It was the first time since July that year-over-year core CPI saw a deceleration in price growth.
Traders stilll see just a 3% chance that the Fed lowers rates in January, per the CME FedWatch Tool. They remain split on whether a cut will come in the back half of this year, with odds of easing in June now seen as more likely than not.
At close: January 14 at 4:38:28 PM EST
^DJI ^IXIC ^GSPC
Wall Street banks posted surging profits thanks to a dealmaking revival and investment banking strength, also boosting spirits Wednesday morning. JPMorgan Chase (JPM) delivered on optimistic analyst expectations with a second straight year of record annual profit and a 50% jump in fourth quarter net income. Its full-year profit of $58 billion was the highest ever in American banking. Its stock rose 1% before the bell.
BlackRock (BLK) stock popped after quarterly profit jumped over 20% as assets hit a record $11.6 trillion. Goldman Sachs (GS), Wells Fargo (WFC) and BNY (BK) shares also gained after the banks booked bumper quarters.
Read more: What a Fed rate cut means for bank accounts, CDs, loans, and credit cards
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