Stock Market Today: Stocks Wobble Ahead of CPI, Q4 Earnings Season

Stocks struggled for direction Tuesday after an early morning speech from Fed Chair Jerome Powell failed to give any hints on the central bank's plans for monetary policy moving forward. Instead, investors looked ahead to a pair of potentially market-moving events occurring later this week: Thursday's release of the December consumer price index (CPI); and Friday's start of the fourth-quarter earnings season. 

Tuesday's choppy price action followed Monday's mixed finish for the major market indexes. At today's close, however, all three benchmarks were higher, with the Dow Jones Industrial Average gaining 0.6% to 33,704, the S&P 500 adding 0.7% to 3,919, and the Nasdaq Composite rising 1.0% to 10,742.

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Thursday's CPI data will be key for investors in gauging the effectiveness of the Fed's aggressive policy of interest rate hikes on combating inflation. Additionally, fourth-quarter earnings season will be critical in showing how corporate America fared at the end of 2022 – and how it is perhaps planning for a possible recession in 2023. More and more companies are announcing layoffs these days, with investment banking giant Goldman Sachs (GS, +1.3%) and cryptocurrency exchange Coinbase Global (COIN, +13.0%) being just two of the most recent examples. 

The Best Semiconductor Stocks to Buy

The tech sector has been a solid performer so far in 2023, with semiconductor stocks in particular putting in a strong showing. Just look at the iShares Semiconductor ETF (SOXX), which is up nearly 8% for the year-to-date. That easily outpaces the S&P 500's gain of roughly 2%. 

The positive price action follows a rough year for semis. In addition to a broader selloff in growth stocks, the industry encountered a number of headwinds over the past 12 months, including a decision by the Biden administration to suspend sales of some U.S. chips to China. 

Still, while Wells Fargo analysts maintain a cautious stance on semis to start the new year, they believe the end of this downdraft could be near. Specifically, they think a bottom could be reached in the first half of 2023, which might be the catalyst for investors to get back into chip stocks. "Upon such a bottoming event, we think investors should be prudent and invest in high-quality, secular growth stories that have the potential to re-rate higher as we move through the downturn in the semiconductor cycle," the analysts write in a note. Investors keen on the sector might want to do some due diligence on the best semiconductor stocks, which range from well-known leaders to under-the-radar gems.