On Friday, January 13th, 2023, the equities market experienced volatility following the release of the Consumer Price Index (CPI) data. The S&P 500 initially dropped by 0.8%, but later rebounded. The data revealed that U.S consumer prices decreased in December for the first time in more than 2 and a half years, due to falling prices for gasoline and other goods, indicating a sustained downward trend in inflation. However, a separate report on the labor market showed that weekly initial jobless claims came in at 205,000, below expectations of 215,000. This has led many market participants to seek signs of weakness in the labor market as an indication of slowing inflation.
The Dow Jones Industrial Average increased by 216.96 points (0.64%) to 34,189.97, the S&P 500 rose by 13.56 points (0.34%) to 3,983.17, and the Nasdaq Composite increased by 69.43 points (0.64%) to 11,001.11.
The Q4 earnings season for S&P 500 companies is set to begin tonight with the release of results from several major U.S. banks. Additionally, The Dollar Index hit its lowest level since early June at 102.07 before slightly recovering, and was last down 0.873%, with EUR/USD up 0.89% to 1.0851. USD/JPY fell 2.56% to 129.18, while GBP/USD was up 0.6% at 1.2215 on the day.
Crude oil prices also increased following the data release, with WTI crude settling at $$78.39 per barrel (1.27% increase) and Brent settling at $$84.03 (1.65% increase).
