S&P 500 Edges Up Amid Cooler PPI Data; Applied Digital and Banks Take Spotlight

The S&P 500 rose 0.1% Tuesday, closing higher alongside a 0.5% gain in the Dow Jones Industrial Average, while the NASDAQ fell 0.2%. Choppy trading followed cooler-than-expected inflation data, which eased recent pressure from rising Treasury yields.

The U.S. Producer Price Index (PPI) increased 0.2% month-over-month in December, below expectations of 0.4%. Year-over-year, PPI rose 3.3%, cooling from the forecasted 3.5%. This data, coupled with falling Treasury yields—10-year yields dipped to 4.785%—allowed investors to anticipate a more flexible Federal Reserve policy in 2024. Market attention now turns to the Consumer Price Index report on Wednesday for further interest rate cues.

Applied Digital surged 10% after Macquarie committed $5 billion to its data centers, acquiring a 15% stake in its high-performance computing unit. Conversely, Boeing fell 2%, delivering only 348 aircraft in 2024 due to production issues stemming from supply chain disruptions and labor strikes.

Earnings season begins Wednesday, with major banks like JPMorgan Chase, Wells Fargo, and Goldman Sachs set to report. Meanwhile, KB Home gained 4% on better-than-expected earnings, while Signet Jewelers dropped 22% after cutting its holiday guidance due to weaker consumer demand.

In other developments, reports suggest Trump’s economic team is planning incremental tariff hikes to strengthen trade leverage, which could fuel inflation fears and affect Wall Street sentiment. This proposal involves monthly tariff increases of 2% to 5% and may be enacted under emergency economic powers.

As inflation concerns and corporate earnings dominate market narratives, traders are closely watching for signals on economic stability and policy direction in the new year.