Stock Market Today: Stocks Close Higher Ahead of December CPI Report

Stocks closed higher Wednesday as investor sentiment remained upbeat ahead of this week's key inflation report and the start of fourth-quarter earnings season.  

The Street will get the final Consumer Price Index (CPI) figures for 2023 ahead of tomorrow's opening bell. Most economists expect the headline December CPI will be slightly higher on an annual basis vs November, while core CPI, which excludes volatile food and energy prices, will be slightly lower.

Markets rallied hard at the end of 2023 on expectations the Federal Reserve will start cutting interest rates as soon as its March meeting. "That is what makes tomorrow's CPI report all the more important, as the data now needs to fall in line with the very bullish expectations priced into the markets," says Craig Erlam, senior market analyst at OANDA.

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On Friday, financial results from several big banks – including Bank of America (BAC, -0.1%) and JPMorgan Chase (JPM, +0.2%) – kickoff Q4 earnings season. While the earnings recession officially ended in Q3, analysts are growing increasingly worried about Q4. According to John Butters, senior earnings analyst at FactSet Research Systems, analysts cut their fourth-quarter earnings per share (EPS) estimates for the S&P 500 by 6.8% from September 30 to December 31. That's significantly greater than the five-year average of a 3.5% decline during the quarter.

Amazon stock pops on layoff news

In single-stock news, Amazon.com (AMZN) jumped 1.6% – gaining $25 billion in market capitalization – after the e-commerce giant said it's laying off several hundred employees in its Prime Video and MGM Studios divisions. Amazon is also cutting 500 jobs in its Twitch unit. The company has laid off roughly 27,000 employees since 2022.

Fellow Magnificent 7 stock Meta Platforms (META) also had a strong day on the price charts, adding 3.7%. Mizuho Securities analyst James Lee lifted his price target on META to $470 from $400. That's the highest target on the Street, according to S&P Global Market Intelligence.

In a note to clients, Lee, who has a Buy rating on Meta, writes that fiscal 2024 revenue estimates for the Facebook parent are "conservative." The analyst also thinks that "WhatsApp could incrementally increase Meta's revenue base by a third over time using AI to automate customer service."

Bitcoin trades lower ahead of SEC's spot bitcoin ETF ruling 

Meanwhile, ahead of today's Securities and Exchange Commission (SEC) ruling on spot bitcoin ETFs (exchange-traded funds), Bitcoin traded just below the $46,000 price point. 

The cryptocurrency spiked all the way up to $47,000 late Tuesday after a tweet on the SEC's X page suggested the regulatory agency approved a spot bitcoin ETF. However, the SEC immediately issued a follow-up tweet that indicated its X page was hacked and that the tweet was fake. The SEC's decision is expected after Wednesday's close.

As for the main indexes, the Nasdaq Composite finished up 0.8% at 14,969, the S&P 500 climbed 0.6% to 4,783 and the Dow Jones Industrial Average added 0.5% to 37,695.

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