01/14/2025 Summary of the US Stock Market

The US stock market closed mixed on January 14, 2025, as investors adopted a cautious stance ahead of key inflation data. The day saw significant volatility, but the S&P 500 managed to close slightly higher.


---

Major Indices:

S&P 500: +0.1% → 5,842.91

Dow Jones Industrial Average: +0.5% → 42,518.28

Nasdaq 100: -0.13% → 20,757.41

Russell 2000: +1.1% → 2,219.24



---

Market Highlights:

1. Volatility Ahead of CPI Report:
The S&P 500 fluctuated between gains and losses throughout the day, closing 0.1% higher. Analysts expect the Consumer Price Index (CPI), due Wednesday, to determine market direction. According to options market estimates, the S&P 500 could move up to 1% in either direction following the report, marking the highest anticipated volatility since the March 2023 banking crisis.


2. Inflation and PPI Data:

The December Producer Price Index (PPI) showed unexpected moderation, driven by declines in food prices and stable service costs.

However, components tied to the Personal Consumption Expenditures (PCE) index showed mixed trends.

Krishna Guha (Evercore): “Unlike November, this PPI report may not significantly impact PCE inflation, keeping market focus on Wednesday’s CPI.”



3. Geopolitical and Sector News:

A ceasefire agreement between Hamas and Israel eased geopolitical tensions, leading to a pullback in oil prices from their five-month highs.

Homebuilders surged on strong earnings from D.R. Horton (+6%), while Eli Lilly fell 6.5% after issuing disappointing sales guidance.





---

Expert Opinions:

Chris Brigati (SWBC):
“Wednesday’s CPI is the key focus. Higher-than-expected inflation could reduce chances for rate cuts in 2025 and even suggest further hikes, while a lower reading could ease market concerns.”

Sam Stovall (CFRA Research):
“A hotter-than-expected CPI would likely slow the pace of Fed rate cuts, weighing on equities.”



---

Upcoming Events:

1. CPI Expectations:
Bloomberg estimates core CPI will rise 0.2% month-over-month and 3.3% year-over-year.


2. Earnings Season Begins:
Major banks, including JPMorgan and Citigroup, will report earnings this week, officially kicking off the Q4 earnings season.

Gina Martin (Bloomberg): “Earnings outlook revisions may have been overly pessimistic, possibly leading to upside surprises.”





---

Corporate Highlights:

Meta (META): Announced plans to cut 5% of its workforce based on performance evaluations.

United Rentals (URI): Acquired H&E Equipment in a $3.4 billion deal.

IonQ (IONQ): Revealed a $1 billion partnership with the state of Maryland to develop quantum computing infrastructure.



---

The mixed market performance reflects investor caution ahead of Wednesday’s CPI data and the beginning of Q4 earnings season, which are expected to set the tone for the market in the coming weeks.