Investing.com – Market Overview

Stock markets in the US are set to be shuttered on Thursday following a muted close in the previous session. Minutes from the Federal Reserve’s December meeting indicate a cautious stance on interest rate cuts this year, considering the potential impact of the incoming Trump administration’s tariff plans. In China, consumer prices showed minimal growth in 2024, despite multiple stimulus measures from Beijing.

1. Stocks Muted

US stocks experienced little change on Wednesday as investors analyzed labor market data and reports on President-elect Donald Trump’s extensive tariff plans.

Traders reviewed the Federal Reserve’s December policy meeting minutes, where officials decided to cut interest rates but maintained a cautious outlook on future reductions.

Benchmark US Treasury yields briefly reached their highest levels since April amid speculation that Trump might use emergency economic powers to implement universal tariffs. Some economists warned that this could reignite inflation.

By the close of trading, the S&P 500 gained 9 points (0.2%), the Nasdaq Composite dropped by 11 points (0.1%), and the Dow Jones Industrial Average increased by 107 points (0.3%). US equity markets will be closed on Thursday to honor former President Jimmy Carter.

2. Fed Members Cautious Amid Trump Uncertainty

Minutes from the Federal Reserve’s meeting revealed concerns regarding Trump’s tariff plans and their potential effect on inflation. Officials expressed worry that the recent slowing in price gains might be influenced by his policies. They caution that reaching the Fed’s inflation target of 2% could take longer than expected.

Following these insights, investors increased expectations that the Fed would keep interest rates unchanged in upcoming meetings, with the earliest cut not predicted until May.

Attention is now focused on Friday’s US employment report, expected to influence Fed deliberations.

3. Chinese Consumer Prices Barely Rise in 2024

In China, consumer prices saw only a slight increase last year, as sluggish domestic demand persisted despite government interventions.

The consumer price index (CPI) rose just 0.2%, matching the previous year, and the official target had been set at 3%. Analysts indicated that food prices contributed to the low inflation.

Expectations for the Lunar New Year to boost inflation are present, but overall price growth is anticipated to remain low in 2025.

4. Bitcoin Slips

Bitcoin experienced a decline on Thursday, continuing a streak of significant losses influenced by the Fed minutes. The cryptocurrency fell by 3.1% to $92,988.1, erasing early 2025 gains amid broader risk aversion.

5. Crude Stable

Oil prices stabilized on Thursday following recent losses, influenced by significant increases in US fuel inventories. As of 03:26 ET, US crude futures (WTI) remained at $73.34 a barrel, while Brent oil held steady at $76.17 a barrel, after both contracts fell over 1% on Wednesday due to a stronger dollar and higher-than-expected fuel stockpiles.

Gasoline stocks rose by 6.3 million barrels last week, reaching 237.7 million barrels, according to the US Energy Information Administration.