U.S. Stock Market Summary for Wednesday, February 12, 2025

 

1. Major Indices Performance

  • S&P 500: Decreased by 0.27%, closing at 6,051.97.
  • Dow Jones Industrial Average: Fell by 0.50%, ending at 44,368.56.
  • Nasdaq 100: Increased by 0.12%, closing at 21,719.26.
  • Russell 2000: Dropped by 0.87%, finishing at 2,255.89.

2. Market Overview

The U.S. stock market closed lower on Wednesday following higher-than-expected January Consumer Price Index (CPI) data. The inflation report weakened expectations for Federal Reserve rate cuts, adding pressure to the market. The 10-year Treasury yield rose to 4.61%, while oil prices declined on news that the U.S. and Russia had agreed to negotiations aimed at ending the war in Ukraine.

  • Consumer Price Index (CPI): January CPI rose 3% year-over-year, exceeding the expected 2.9%.
  • Federal Reserve Policy Outlook: Fed Chair Jerome Powell stated, "Significant progress has been made in controlling inflation, but there is still a long way to go," signaling continued tight monetary policy.
  • Market Reaction: Treasury yields climbed, weakening expectations of a Fed rate cut, while some tech stocks helped pare losses.

3. Sector Performance

  • Healthcare: CVS Health (+15%) surged after exceeding Q4 earnings expectations.
  • Biotechnology: Gilead Sciences (+7.5%) rose due to strong quarterly earnings and optimism over FDA approval of its HIV drug lenacapavir.
  • Energy: The sector declined as oil prices fell, with the Energy Select Sector SPDR Fund (XLE) down 2.7%.

4. Federal Reserve & Market Expert Opinions

  • Ellen Zentner, Morgan Stanley: "Higher interest rates may persist for longer."
  • Steve Sosnick, Interactive Brokers: "The market continues to interpret every dip as a buying opportunity."
  • Seema Shah, Principal Asset Management: "If this inflation trend continues, the Fed may not be able to cut rates this year."
  • Anna Wong, Bloomberg Economics: "The rise in CPI may be partially attributed to seasonal 'January effects'."

5. Corporate Earnings & Key News

  • Robinhood (HOOD): Reported better-than-expected earnings.
  • AppLovin (APP): Surpassed earnings expectations.
  • Reddit (RDDT): Stock fell after daily active users came in below expectations.

6. Conclusion

The higher-than-expected CPI data has reduced expectations for Fed rate cuts, increasing market volatility. While the healthcare and biotech sectors benefited from strong earnings, the energy sector suffered from falling oil prices. Investors will closely watch upcoming economic data to gauge the Fed’s policy direction.

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