Stocks ended Thursday near the flat line after a fresh round of inflation data reflected an uptick in consumer prices for December.
The Nasdaq Composite closed at the flat line, settling at 14,970.19. The Dow Jones Industrial Average eked out a gain of 15.29 points, or 0.04%, to close at 37,711.02. The S&P 500 edged lower by 0.07% to end at 4,780.24. Earlier in the session, the broad market index briefly traded above its record closing high of 4,796.56.
December's consumer price index report came out slightly higher-than-expected, reflecting a 0.3% increase in consumer prices for the month, pushing the annual rate to 3.4%. Economists polled by Dow Jones had predicted that the CPI rose 0.2% in December and 3.2% on a year-over-year basis.
Core CPI, excluding volatile food and energy prices, came in line with expectations, however, pointing to persistent—yet easing—inflation pressures. The data released on Thursday suggests that future interest rate cuts may be slower to come.
"This uptick in CPI is a critical reminder of the unpredictable nature of economic recovery and the murkiness of the macro-economic data," said Jon Maier, chief investment officer at Global X. "Markets may need to brace for potential volatility, as the Fed could maintain or potentially intensify its restrictive monetary policy stance in response to these inflationary pressures."
Yields initially rose on the back of the CPI data, with the rate on the 10-year note reaching a high of 4.068% before slipping to about 3.98%.
Thursday's market action is, in part, influenced by tempered expectations surrounding the Federal Reserve's rate cut timeline as well as earnings jitters, according to CFRA chief investment strategist Sam Stovall. This week is kickstarting the fourth-quarter earnings season, with banking behemoths Bank of America, Wells Fargo and JPMorgan Chase set to report results Friday.
"Earnings are adding to investor agita," Stovall said. "We are in the pre-earnings period where there is a bit of nervousness, because on December 31, earnings were expected to be up 2.1% In the final quarter and are now expected to be up 1.7%."
According to Carson Group global macro strategist Sonu Varghese, big bank earnings on Friday should reflect a generally strong consumer, which should lend to a rosier picture for the U.S. economy and nominal GDP growth.
Elsewhere in Thursday's market, bitcoin ETFs rose on their first day of trading as crypto prices also edged up. Bitcoin briefly hit the $49,000 mark earlier Thursday before falling to above $46,000. The moves follow Wednesday's approved rule changes from the U.S. Securities and Exchange Commission which opened the door for bitcoin exchange-traded funds and expanded investors' access to the flagship crypto.
Stocks are coming off a winning session, with all three major indexes rising on Wednesday.
Stocks were little changed on Thursday, as investors assessed December's hotter-than-expected consumer price index report released earlier in the day. Here's how the major indexes closed up:
— Pia Singh
The Federal Aviation Administration said Thursday it has opened a probe on Boeing after a panel on the side of one of its Boeing 737 Max 9 planes blew off midflight on Saturday.
The investigation will dig into whether Boeing "failed to ensure completed products conformed to its approved design and were in a condition for safe operation in compliance with FAA regulations," the FAA said.
Shares of Boeing slipped nearly 2% in midday trading.
— Leslie Josephs, Michelle Fox
Steven McClurg, CIO at Valkyrie Investments, said that the volatile trading in bitcoin on Thursday seemed to be reasonable trading activity rather than a sign that the new ETFs were putting stress on the crypto market.
"The price movement was actually fairly close to what I expected. ... I was expecting price to hit or exceed $48,000, which it did, and then it came in quite nicely. There's always people that are going to sell when there's any kind of uptick in price like that," McClurg said.
McClurg also said that trading of the ETFs has so far gone more smoothly so far, even given some of the complexities of bitcoin.
"There was a lot more volume in the beginning of the day, and it seems like it's leveling out. That is typical of these types of launches," McClurg said.
— Jesse Pound
Bitcoin miners gave back earlier gains as the price of the cryptocurrency retreated in volatile trading, after the Securities and Exchange Commission's approval of the first U.S. spot bitcoin ETFs, which hit the market Thursday.
The two biggest mining stocks, Marathon Digital and Riot Platforms each lost more than 15%. Wall Street favorites Iris Energy and CleanSpark fell 9% and 7%, respectively. Investors were taking profits after the price of bitcoin briefly spiked to above $49,000 for the first time since December 2021. It has pulled back since to the $46,000 level.
Miners were some of the biggest gainers in the stock market in 2023. Marathon finished this year higher by almost 590%, while Riot rose more than 350%. CleanSpark and Iris Energy posted gains of more than 400%.
— Tanaya Macheel
Small-cap stocks took a hit on Thursday during what was otherwise a muted session.
The small-cap focused Russell 2000 slipped about 1% in Thursday afternoon trading. Meanwhile, the Dow, S&P 500 and Nasdaq Composite all traded around their respective flatlines.
— Alex Harring
While the newly launched bitcoin ETF funds have certainly taken the spotlight, Wall Street analysts are also considering their impact on existing companies such as crypto exchange platform Coinbase.
"We see the impact of a Bitcoin ETF as having both positive and risky elements for Coinbase, but given the appreciation of Coinbase's stock price, we see the risks as more relevant to shareholders," wrote JPMorgan analyst Kenneth Worthington.
Wedbush reiterated its outperform rating on the stock and sees Coinbase rallying 19% from here.
On the other hand, Mizuho stood by its underperform rating, believing that the new ETFs could cannibalize Coinbase's existing trading trading margins. Analyst Dan Dolev forecasts that the stock could dip 64%.
CNBC Pro readers can find the full story here.
— Lisa Kailai Han
Oil prices settled higher on Thursday after Iran seized an oil tanker in the Gulf of Oman, renewing fears that Middle East tensions would disrupt crude supplies.
The West Texas Intermediate futures contract for February rose 65 cents, or .91%, to settle at $72.02 a barrel. The Brent futures contract for March gained 61 cents, or .79%, to settle at $77.41 a barrel.
U.S. crude and the global benchmark both rose more than $2 earlier in the trading session, but pulled back after data showed inflation increased more than expected in December.
— Spencer Kimball
Opening the door for bitcoin spot ETFs is a "monumental" development for the cryptocurrency but is still a long way from its proponents goals, economist Mohamed El-Erian said Thursday.
"This is really important as an investment, but let's not get carried away," the chief economic advisor for Allianz said during a CNBC "Squawk Box" interview. "The global currency objective that some people have is still as far ahead of them as it was before."
El-Erian said the SEC's decision to approve the bitcoin ETFs does accomplish three important goals: broadening participation in crypto for investors, helping to "provide legitimacy" following multiple scandals, and giving "cover" for other regulators to approve similar moves.
Still, he said, "you will find regulators much more hesitant to allow crypto to evolve into a global currency, and there's lots of reasons for that."
—Jeff Cox
Optimism about the the immediate outlook for stocks over the next six months stayed at an "unusually high level" once again in the latest weekly poll by the American Association of Individual Investors.
Bullishness was unchanged at 48.6% of investors in the week through Wednesday, above its historical average of 37.5% for a 10th straight week and the 11th time in 14 weeks.
Bearishness about stock prices rose slightly, to 24.2% from 23.5% last week, but still means that pessimism is below its historical average of 31% for a 10th consecutive week.
All this optimism and lack of pessimism is bad news for contrarian investors who try and go against the crowd rather than with it. Typically, contrarians interpret high levels of bullishness as meaning most of the buying in the market is done and there's less cash on the sidelines to put into the market.
— Scott Schnipper
A handful of major bank stocks slipped in Thursday trading as investors readied for their earnings reports expected Friday before the bell.
Citi led the group lower with a slide of more than 2.5%. Bank of America fell around 2%, while JPMorgan dropped 1.2%. Wells Fargo shed 0.7%.
— Alex Harring
Shares for Coinbase and Robinhood slid about 7% and 3%, respectively, as traders deliberated how the approval of bitcoin exchange-traded funds could weigh on the crypto trading platforms.
— Fred Imbert
These are the stocks moving the most in midday trading:
Read the full list of stocks moving here.
— Lisa Kailai Han
Tech giants Alphabet and Amazon were among the 31 stocks in the S&P 500 that hit 52-week highs on Thursday.
Of those 31 names, 21 reached all-time highs. Microsoft was among those, trading at all-time high levels back to its IPO in March 1986, as was Nvidia, which hit levels not seen since it went public in January 1999.
Here are some other stocks that hit the milestone on Thursday:
— Chris Hayes, Michelle Fox
Ark Invest's Cathie Wood said the approval of bitcoin exchange-traded funds in the U.S. made her more convinced that the world's largest cryptocurrency could hit her wildly bullish target.
For her bull case, the ARK Invest chief sees bitcoin hitting $1.5 million by 2030. Her base case is in the $600,000 range, she said.
"We think the probability of the bull case has increased with this SEC approval. This is a green light," Wood said on CNBC's "Squawk Box" Thursday. "It is the first global decentralized digital rules based ... monetary system in history. It is a very big idea."
— Yun Li
Slightly hotter than expected inflation data from December is unlikely to knock the Federal Reserve off course from cutting interest rates later this year, economist Paul McCulley said Thursday.
Even with the consumer price index showing that that inflation rose 3.4% from a year ago, McCulley contended that the Fed's policy "pivot is unambiguously in."
"The next move is a cut, and it's going to be a series of cuts to take us back to neutral. That's the theme the market is working on. I think it's the right theme and the day's data doesn't change that really at all," McCulley said during an interview on CNBC's "Squawk on the Street."
Nevertheless, stocks fell following the inflation news.
"It's noisy in the data, it's noisy in the market, but we're fundamentally in a soft landing with a pivot already in rhetorically and we're just waiting for it come in reality, timing, pace and magnitude," McCulley added.
—Jeff Cox
Shares of Coinbase and Robinhood were lower Thursday as traders weigh how the approval of bitcoin exchange-traded funds in the U.S. could weigh on the crypto trading platforms.
Coinbase and Robinhood were both down more than 1% in early trading. They started the session trading higher.
— Fred Imbert
With 11 bitcoin ETFs set to begin trading on Thursday, competition is heavy and could eventually divide into a group of distinct winners and losers.
Grayscale CEO Michael Sonnenshein said Thursday on CNBC's "Squawk Box" that he doesn't think all of the new ETFs will prove successful.
"There will be some consolidation. You will see some of these products either peter out, or you will see that a couple of them enough significant enough [assets] to still have assets," Sonnenshein said.
The consolidation could take theoretically take the form of less successful funds closing, being sold to larger funds, or the asset managers combining forces.
"Anything is possible," Sonnenshein said, including potentially buying other asset managers or selling Grayscale.
— Jesse Pound
The S&P 500 rose 0.3% at the open, while the Dow Jones Industrial Average gained 93 points, or nearly 0.3%. The Nasdaq Composite advanced 0.4%.
— Pia Singh
Oil prices jumped Thursday after an oil tanker was hijacked by armed individuals near the Gulf of Oman.
The West Texas Intermediate futures contract for February gained $1.38, or 1.93%, to trade at $72.85. The Brent futures contract for March jumped 1.94% to trade at $78.29 a barrel.
The oil tanker St. Nikolas was boarded by four to five armed individuals Thursday and changed course toward Iranian waters. The vessel was heading to the Turkish port Aliaga after loading crude at Iraq's Basrah Oil Terminal.
The incident is the latest in a series of attacks on commercial vessels in the Middle East in the wake of the devastating war in Gaza. Houthi militants in Yemen have repeatedly attacked ships in the Red Sea, forcing ocean carriers to reroute trade around the Cape of Good Hope in South Africa.
— Spencer Kimball
The new bitcoin ETFs come at a wide range of price points, with long-term management fees ranging from 0.20% for Bitwise to 1.5% for Grayscale.
Several of the funds are also offering temporary waivers that will bring the fee to 0% in the short-term.
The lowest priced funds situate bitcoin ETFs as more expensive than the most popular equity funds, but cheaper than major commodity funds.
Take a look at the full fee list here.
— Jesse Pound