US stocks were broadly higher on Tuesday as investors received the first of two major inflation reports this week, which showed prices rising less than expected in December. Also in focus was a report that the incoming Trump administration may gradually raise tariffs to ease inflationary pressures.
The S&P 500 (^GSPC) rose nearly 0.4%, while the Nasdaq Composite (^IXIC) rose 0.6%, both set to rebound from Monday’s losses. Meanwhile, the Dow Jones Industrial Average (^DJI) added 0.4% following a winning day for the blue-chip index.
The Producer Price Index, which tracks price changes seen by businesses at the wholesale level, rose 3.3% from a year ago, compared with 3% in November but less than economists expected. It rose 0.2% compared to the previous month, which was also lower than expected. The report lays the foundation for the consumer inflation reading expected on Wednesday.
Meanwhile, President-elect Donald Trump’s team is considering implementing promised tariff increases month after month rather than imposing higher levels in one move, Bloomberg reported, in an effort to help prevent inflation from rising.
The possibility that Trump’s policies would increase price pressures was worrying markets, because that could limit the Fed’s scope to cut interest rates. But a UBS strategist said gradual tariffs could remain a “problem” for the central bank’s efforts to finish the job of cooling inflation.
As of 9:46:35 AM EST. The market is open.
^ DJI ^ IX ^ GSBC
Following the tariff report, the dollar (DX-Y.NYB) fell after a five-day winning streak, while the 10-year Treasury yield (^TNX) retreated from 14-month highs that were exploited in Monday’s bond sell-off.
On the corporate front, shares of KB Home (KBH) jumped more than 10% in early trading after the homebuilder’s fourth-quarter earnings beat estimates.
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