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Stock Market Today: Nasdaq Composite Rips Higher as Inflation Slows
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Magnificent 7 Check-In
With stocks rallying after today’s CPI number, let’s take a look at how the Magnificent 7 is performing.
- NVIDIA: 2.84%
- Microsoft: 2.53%
- Apple: 1.83%
- Meta Platforms: 4.26%
- Tesla: 5.76%
- Alphabet: 3.01%
- Amazon: 2.20%
In news around the Magnificent 7, NVIDIA is holding a Quantum Computing Day at it’s GTC event. The company may be reaching out an olive branch of sorts after comments from CEO Jensen Huang sent stocks in the sector plummeting.
Hyperscalers – Microsoft, Alphabet, and Amazon – may prove to be big winners if new AI regulations from the Biden Administration stick. Analysts on Wall Street have commented today that the regulations may serve as a form of “regulatory capture” that gives all three companies additional demand in the cloud computing space.
Sectors Outperforming Today
What sectors are performing well in a generally red-hot market day?
Communications Services (headlined by Meta Platforms and Alphabet) is up 2.3%. Financials are up 2.17% after a series of outstanding earnings we detailed below. Below those two sectors, Consumer Discretionary is up 2.08% and Information Technology is up 1.74%.
Even though markets are generally seeing outstanding returns today, two sectors are down. Health Care stocks are down .23% and Consumer Staples are down .21%.
It appears with interest rates falling, investors are moving from areas of safety (like Consumer Staples) back to more ‘risky’ segments of the market.
Have we already reached peak interest rates? After a CPI release that shows inflation running less hot than expected, the yield on 10-year Treasuries is plummeting. Yields now stand at 4.65%, a nearly 3% drop from yesterday.
And as yields on Treasuries drop, the market rises. The single biggest headwind to the market so far in 2025 is the belief that rising rates will slow economic growth. We’ll dive into today’s CPI data more below.
First, let’s check in on the performance of major indexes today.
- Nasdaq Composite: Up 414.91 (+2.17%)
- S&P 500: Up 94.64 (+1.62%)
- Dow Jones Industrial Average: Up 637.94 (+1.50%)
Here are the biggest stories driving the market today.
CPI Data Leads to Market Rally
The biggest storyline so far in 2025 is interest rates. After bottoming at 3.62% last September, the yield on 10-year Treasuries has been steadily on the rise. In recent days it set reached its highest point since 2023, breaking 4.8%.
The two numbers the market is focused on most closely are employment and inflation data. The belief is that if the job market continues showing significant strength and inflation stays elevated, the Federal Reserve will keep rates at their current level. Then with rates at their current level, the economy will be slow enough that corporate earnings will miss their estimates this year.
Yesterday wholesale inflation numbers were released that came in below expectations.
The big economic release today is CPI, which is the most broadly watched inflation figure. The headline figure is that CPI rose 2.9%, which is above recent readings (such as 2.4% in September). On the surface, that might sound bad, especially with the Federal Reserve having a target of driving inflation down to 2% over time.
However, digging into the number more, core inflation fell to 3.2%, which was below median expectations from economists. That’s the figure that Wall Street is focusing on today as the market resumes its rally.
As of this morning, it’s now implied that the Federal Reserve will cut rates twice in 2025. That’s a jump from recent expectations and why the market is on the rise today.
Big Banks Report Earnings
Earnings season kicked off today and the first group of companies reporting is heavily concentrated in the banking sector. We are following the results of these baking earnings in a separate live blog.
But the headline is the results have beat across the board.
JPMorgan saw profits soar 58% from last year, Wells Fargo saw a jump of 66%, Goldman Sachs EPS hit $11.95 versus an expectation of $8.22, and Citigroup reported an EPS of $1.34 versus estimates of $1.22.
JPMorgan Chase is currently up 1.6%, Goldman Sachs up 4.8%, Citigroup up 6.1%, and Wells Fargo up 6.1%.
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