Stocks rise after light inflation report, rebound in tech shares: Live updates

Stocks were higher Tuesday after the producer price index, the first of two major inflation reports this week, came in cooler than expected.

The Dow Jones Industrial Average gained 194 points, or 0.5%. The S&P 500 added 0.4%, and the tech-heavy Nasdaq Composite advanced 0.6%.

Some big tech stocks managed to climb higher, putting the sector in the green Tuesday morning, after suffering losses on Monday and the previous week as investors traded out of the sector. Tesla and Palantir rose around 3% each.

The producer price index, which measures wholesale inflation, increased just 0.2% in December, according to a Bureau of Labor Statistics report. Economists polled by Dow Jones had estimated a 0.4% rise. Core PPI, which excludes food and energy, was flat.

Investors are now looking toward Wednesday’s consumer price index report for insights on the Federal Reserve’s next move on interest rate policy.

Tuesday’s light PPI print “is stock market-friendly, because it helps to calm fears that we were on the verge of an inflation acceleration,” said Chris Brigati, SWBC chief investment officer.

“All eyes are now on Wednesday’s CPI report, as it will fuel the market’s Fed-obsessed sentiment,” Brigati said. “A strong inflation number adds to this idea of no cuts in 2025, and potentially even a rate hike, while a weak inflation data point may help to calm the market’s Fed fears.”

Fed funds futures trading suggests a near-certainty that the Fed will hold steady on interest rates at the conclusion of its two-day meeting later this month. Markets pricing also suggests an 79% chance of rates staying at their current target range of 4.25%-4.5% in March, according to the CME FedWatch Tool.

On the earnings front, banking behemoths will kick off fourth-quarter earnings season this week, with JPMorgan Chase, Citigroup, Goldman Sachs and Wells Fargo posting results on Wednesday. Morgan Stanley and Bank of America are slated to report on Thursday.