Elevated Stock Market Continues Strong Week Leading to CPI
A bullish stock market is holding steady as the week progresses closer to the release of the consumer price index, with the Dow Jones up by 0.38% Monday evening.
Tuesday’s market could open strong thanks to an elevated closing on Monday, with all three indices up, including the Nasdaq Composite gaining 0.98% and the S&P 500 adding 0.67%. We could see the market remain high even when the CPI report releases on Wednesday, as it is likely to show price increases that reflect sticky inflation.
Magnificent Seven stocks are mostly elevated as well, with many of the favorite stocks showing signs of strength at the moment. This includes Microsoft, Apple, Google, Nvidia, Amazon, and Meta. One of the prominent stocks that has fallen this week, though, is Tesla (TSLA), which dropped by 3.01% on Monday evening.
That stock is balanced out on the indices by Nvidia (NVDA), which gained 2.87% as well as Amazon (AMZN) 1.74%. Several of the top stocks are benefitting from decent quarterly earnings reports, while others continue to get a boost from President Donald Trump’s economic policies that are aimed in part at big businesses.
What to Expect from the CPI
U.S. consumer inflation was still high when 2025 began, remaining at 2.9% for much of last year. The cost of living is expected to demonstrate a 2.8% increase for the last year, according to a report coming out of the Bureau of Labor Statistics. That indicator is down slightly from December of last year, when it was 2.9%.
Inflation fell in mid-2024 and then climbed again in December, where it has remained since then. Inflation is expected to show a certain stickiness for now that the Federal Reserve cannot deny, meaning that the Fed will be unlikely to issue any interest rate cuts beyond the very few it has already discussed for 2025.
If the CPI is within expectations, then the stock market could remain elevated, though taking a slight dip after the report. A higher than expected CPI, however, could cause the market to drop significantly.
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