Stock Market Today: Stocks bounce from inflation rout on Big Tech support

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U.S. stocks bounced higher Wednesday, following on from the worst day on Wall Street in nearly a year, as investors look to recalibrate Federal Reserve rate forecasts following a surprise pickup in core inflation pressures.

Updated at 9:50 AM EST

Austan Morning ... 

Chicago Fed President Austan Goolsbee added a modest early tailwind to U.S. stocks with comments from a speech to the Council on Foreign Relations in New York that suggested the January CPI report shouldn't blow the Fed's inflation fight off-course.

 "Even if inflation comes in a bit higher for a few months ... it would still be consistent with our path back to target," Goolsbee said. "I don't support waiting until inflation on a 12-month basis has already achieved 2% to begin to cut rates." 

The S&P 500 added 21 points, or 0.47%, in the opening minutes of trading following last night's rout, with the Dow gaining 70 points and the Nasdaq up 98 points, or 0.63%

* GOOLSBEE: DON’T SUPPORT WAITING UNTIL INFLATION AT 2% FOR CUT

⁦@JohnSpall247⁩ ⁦@Austan_Goolsbee⁩ #FOMC pic.twitter.com/NLc8pW137O— Carl Quintanilla (@carlquintanilla) February 14, 2024

Updated at 9:06 AM EST

Bonds under water

Treasury yields are nudging higher again in early trading, with the 30-year bond rising to 4.485%, the highest since December 1, following yesterday's inflation-trigged rout.

Benchmark 10-year note yields, meanwhile, are testing Tuesday's session highs and were last marked at 4.321%, a move that could provide a stern headwind to the stock's market's effort to clawback a 68 point decline for the S&P 500. 

Global Bonds Erase All Gains Since Powell’s Pivot in December

Treasury 10-year yields advance following US CPI data
TD Securities sees risk of price pressures shifting higherhttps://t.co/KdSzwtL6Ju pic.twitter.com/6NSX0jeZmk— Global Markets Investor (@GlobalMktObserv) February 14, 2024

Updated at 8:43 AM EST

Nvidia 2 trillion? 

Nvidia  (NVDA)  shares are back on the march, after overtaking Amazon  (AMZN)  as the market's fourth most-valuable stock with its sights set on both Alphabet's  (GOOG)  third place standing and the $2 trillion market cap threshold.

Nvidia, which publishes its fourth quarter earnings on February 21, was last marked 1.5% higher in pre-market trading at $732.00 each.

Related: Nvidia nears major market milestone as AI hype puts earnings in new focus

Stock Market Today

Stocks were hammered yesterday when the Labor Department's January inflation report showed both an acceleration in monthly core prices as well as a smaller-than-expected slowing of the headline CPI reading, suggesting the Fed will struggle over the 'last mile' of its effort to bring inflation back toward its preferred 2% target.

The report triggered a massive selloff in Treasury bonds, which are the most-sensitive to inflation pressures, and pushed the U.S. dollar index to the highest levels in more than three months as traders revived concerns that the Fed may have to raise rates again should price pressures accelerate into the coming months.

Related: Inflation delivers knockout blow in stocks’ ‘Fight the Fed’ battle

"A market that forcefully expected earlier easing — fortified by a series of rate cuts throughout the year — has had to digest not just a barrage of consistent Fedspeak but the stark reality that the Fed can still not declare victory on its long campaign to quell inflation," said LPL Financial's chief global strategist, Quincy Krosby.

"Even though rate cuts will probably begin in 2024 — it’s not if but when — the last mile is getting longer," she added.

Benchmark 10-year-note yields, which surged more than 20 basis points during yesterday's selloff to a session high of 4.345%, were last marked at 4.306%, while 2-year note yields steadied at 4.616%.

The U.S. dollar index, which tracks the greenback against a basket of six global currency peers, was marked 0.05% lower, trading just under the 105 mark at 104.896 in early New York dealing.

On Wall Street, the S&P 500 gave back 68 points, or 1.37%, into the close of trading, the worst inflation-triggered slump since September 2022. The small-cap Russell 2000 index, which consists of companies that rely heavily on bank funding, tumbled 4.3% for its biggest single-day decline since June 2022.

Market volatility gauges are back on the rise, as well, with CBOE Group's VIX index jumping to an early November high of $15.15 in overnight dealings. At that level traders are expecting daily price swings for the S&P 500 of around 0.95%, or 47 points, each day over the next month. 

Stocks are looking to claw back some of last night's losses in the early trading hours, however, with futures tied to the S&P 500 suggesting an opening-bell gain of around 23 points, with the Dow called 83 points higher.  

The tech-focused Nasdaq is called 118 points higher, helped by premarket gains for Nvidia  (NVDA) , Advanced Micro Devices  (AMD)  and Tesla  (TSLA) . 

In overseas markets, last night's selloff on Wall Street pulled the Nikkei 225 from its recent 1990 highs, although a weaker yen continues to support export stocks and the benchmark's losses were limited to a 0.69% session decline.

In Europe, a flat inflation reading in Britain, where consumer prices rose 4% in January, triggered bets of a spring rate cut from the Bank of England, helping the FTSE 100 rise 0.78% in early London dealing.

The regionwide Stoxx 600, meanwhile, was marked 0.41% higher in early Frankfurt trading. 

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