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Investing.com — U.S. stock markets opened higher on Wednesday, shrugging off a slightly higher-than-expected print for inflation in December that cemented expectations for repeated interest rate hikes in the coming 12 months.
By 9:45 AM ET (1445 GMT), the Dow Jones Industrial Average was up 90 points, or 0.3%, at 36,342 points. The S&P 500 was up 0.4% and the Nasdaq Composite was up 0.6%, on course for a third straight day of gains.
At the same time, benchmark 10-year Treasury yields moderated by 2 basis points to 1.72%. They had been as high as 1.80% earlier in the week, in response to new forecasts from private economists that envisaged four rate hikes from the Federal Reserve this year.
Fed Chair Jerome Powell’s testimony at the confirmation hearing for his second term on Tuesday had produced no major surprises, allowing market participants to feel that the new forecasts were sufficiently priced in.
Earlier, the Bureau of Economic Analysis had confirmed expectations that annual inflation hit a 40-year high in December, against a backdrop of supply chain disruptions, labor shortages and strong household balance sheets that are allowing consumers to sustain the pace of their spending despite the end of many pandemic-related fiscal supports last year. The report was strong all across the board, with both headline and core consumer prices rising a touch more than expected from November, up 0.5% and 0.6% respectively. The annual headline rate rose to 7.0%, a level it hasn’t seen since the last oil shock in 1982.
