Here are the most important news, trends and analysis that investors need to start their trading day:
- Wall Street looks higher after two-session tech rebound
- Consumer prices rise at fastest clip since 1982, but matched estimates
- Fed chief Powell says tighter policy needed to control inflation
- Omicron may be headed for a rapid drop in Britain, the U.S.
- Biden sending more Covid tests to schools to keep them open
U.S. stock futures were picking up steam higher Wednesday after another hot but expected inflation report.
- The Nasdaq on Tuesday rallied for the second session as tech stocks continued to rebound. The index gained 1.4% as bond yields stabilized, taking some pressure off growth-orientated names, which appeared to have found their footing after a rough start to the new year.
- The S&P 500 rose nearly 1%, breaking a five-session losing streak.
- The Dow Jones Industrial Average gained 0.5%, ending a four-session down streak.
- The S&P 500 and the Dow on Tuesday finished nearly 1.8% and 1.5% away, respectively, from their record closes last week. The Nasdaq ended 5.6% away from its November record close.
The government's December consumer price index on Wednesday showed an increase of 7% year over year, in-line with estimates and the hottest increase since June of 1982. Core CPI, which excludes food and energy, rose 5.5% year over year, slightly higher than expectations and the biggest growth since February 1991.
Inflation has been eating into otherwise strong wage gains for workers. The 10-year Treasury yield on Wednesday dipped under 1.72% after of the data and following a spike this year to over 1.8% earlier this week. Federal Reserve officials largely attribute rising inflation pressures to pandemic-specific issues in which a shortage of workers has led to clogged supply chains and empty store shelves
Fed Chairman Jerome Powell, with a seemingly clear path to a second term heading the central bank, declared on Tuesday the U.S. economy is both healthy enough and in need of tighter monetary policy to control inflation. That will likely mean interest rate hikes this year, tapering of monthly asset purchases and reducing the Fed's balance sheet. Powell made the comments during his confirmation hearing, during which key senators indicated they will be supporting him for a second term.
Scientists are seeing signals the rapidly spreading Covid omicron variant may be have peaked in Britain and may be ready to do the same in the U.S. Omicron has proved so contagious that it may already be running out of people to infect, just a month and a half after it was first detected in South Africa. The University of Washington's own highly influential model projects the number of daily reported cases in the U.S. will hit 1.2 million by Jan. 19 and then start to fall sharply. The latest seven-day average of new daily infections was 747,267, according to a CNBC analysis of Johns Hopkins University data.
The White House is increasing federal support for Covid testing for schools in a bid to keep them open as the omicron variant rips across the U.S. The Biden administration announced Wednesday it's making a dedicated stream of 5 million rapid tests and 5 million lab-based PCR tests available to schools starting this month. The effort is aimed at easing supply shortages and promoting safety in schools. That's on top of more than $10 billion devoted to school-based tests authorized in the Covid relief law.