Stock Market Today: Stocks Slip as Inflation Worries Rise
Concerns over price pressures are growing ahead of next week's Fed meeting.
Joey Solitro
Stocks were choppy Friday, though all three main benchmarks closed with weekly gains. All eyes are on next week's Fed meeting – particularly after President Donald Trump's comments on interest rates during a virtual appearance at Davos – though the latest batch of earnings reports created plenty of headlines too.
At the close, the Dow Jones Industrial Average was down 0.3% at 44,424, the S&P 500 was off 0.3% to 6,101 and the Nasdaq Composite had shed 0.5% to 19,954.
The Federal Open Market Committee (FOMC) will conclude its two-day policy meeting next Wednesday afternoon. The group is widely expected to keep the federal funds rate unchanged this time around – even after Trump on Thursday told a group of business leaders gathered in Switzerland that he will "demand interest rates drop immediately."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Still, as many folks have been quick to point out, the Federal Reserve remains independent of the executive branch and so at this point, there's little Trump can do to change the outcome of the next Fed meeting.
One hurdle to the Fed's rate-cutting plans is sticky price pressures. Indeed, Fed Chair Jerome Powell said in his press conference following the central bank's December meeting that any additional rate cuts will require seeing progress on inflation.
University of Michigan data shows inflation worries are growing
And the Fed isn't alone in its concerns about inflation. Today's University of Michigan consumer sentiment data showed year-ahead inflation expectations jumped to 3.3% in January from 2.8% in December – the highest since May 2024. Long-term inflation expectations also rose, to 3.2% from 3.0%.
"Concerns over the future trajectory of inflation were visible throughout the interviews and were tied to beliefs about anticipated policies like tariffs," says Joanne Hsu, director of Surveys of Consumers at the University of Michigan.
Elsewhere on the economic calendar, data from the National Association of Realtors revealed existing home sales rose 2.2% from November to December, to a seasonally adjusted annual rate of 4.24 million. This was the strongest pace since February 2024.
American Express hikes dividend
In single-stock news, American Express (AXP) reported higher-than-expected fourth-quarter earnings and revenue stock thanks to strong card member spending. The company also announced a 17% dividend hike, marking the fourth straight year it has raised its payout.
However, the Dow Jones stock slumped 1.4% after the credit card company's full-year earnings per share forecast of $15.25 fell short of what some analysts are expecting.
Price hikes fuel Verizon's beat
Verizon Communications (VZ) was one of the best Dow stocks Friday, gaining 0.9% after the telecommunications company beat top- and bottom-line expectations for its fourth quarter.
Helping boost Verizon's results was a 3.1% increase in wireless revenue, which the company says is a result of price hikes and sales perks.
Other stocks on the move
Outside of the earnings calendar, Novo Nordisk (NVO) stock soared 8.5% after the Danish pharmaceutical company announced positive early stage results for its once-weekly weight loss drug, Amycretin.
"The company is working with regulators on new indications for its GLP-1 treatments and is also focused on launching new products," wrote Argus Research analyst Jasper Hellweg in a January 16 note. He adds that given the company's "strong track record and growth outlook," NVO deserves to be trading at a higher valuation than it currently is.
Twilio (TWLO) stock surged 20.1% after the cloud communications company unveiled its financial targets for fiscal years 2025 to 2027, which exceeded analysts' expectations.
"We come away from Twilio's Investor Day positive on its direction and more confident in its ability to accelerate growth," says Oppenheimer analyst Ittai Kidron. He admits that while management's vision isn't new, it comes at a time "when the need for an efficient and compelling omnichannel customer and contextually enhanced experience is rising."
Related content
- January Federal Reserve Meeting: Updates and Commentary
- What Could Derail the Economy This Year?
- Four Ways to Invest in Quantum Computing
-
Is the Housing Market's "Lock-In Effect" Finally Starting to Ease?As mortgage rates stabilize and fewer owners hold ultra-low loans, the lock-in effect may be losing its grip.
-
My wife says our $4.3 million savings are 'our grandkids' inheritance.'I want to travel while we are still healthy, but my wife wants to pass down our wealth. Who is right?
-
Senior Living Communities: A Guide to Finding the Right FitSenior living facilities have improved and are as diverse as the people who inhabit them. Now, they're more than just a place to go — they're a place to grow.
-
Today's Senior Living Communities Are Not Your Grandma's 'Old Folks' Home': An Expert Guide to Shopping for the Right Fit
Senior living facilities have improved and are as diverse as the people who inhabit them. Now, they're more than just a place to go — they're a place to grow.
-
3 Common Misconceptions About Working With a Financial PlannerThink financial planners are only for the wealthy and that AI can replace human advice? Nope. Even people with moderate wealth need professional advice.
-
Should You Consider Investing in the Quantum Computing Sector? This Investment Adviser Has Some SuggestionsInvestors interested in quantum computing could consider ETFs focused on cloud services enabling small businesses to use big technology.
-
S&P 500 Hits New High Before Big Tech Earnings, Fed: Stock Market TodayThe tech-heavy Nasdaq also shone in Tuesday's session, while UnitedHealth dragged on the blue-chip Dow Jones Industrial Average.
-
Yes, Artificial Intelligence Stocks Are BoomingIt's fair to ask about the latest tech boom, "Is it really different this time?"
-
I'm an Estate Planning Attorney: These Are the Estate Plan Details You Need to Discuss (And What to Keep Private)Gen Xers and Millennials would like to know if they're going to inherit (and how much), but Baby Boomers in general don't like to talk about money. What to do?
-
I'm a Financial Adviser: This Is How You Can Minimize the Damage of Bad Market Timing at RetirementPoor investment returns early in retirement on top of withdrawals can quickly drain your savings. The ideal plan helps prevent having to sell assets at a loss.
-
'You Owe Me a Refund': Readers Report Challenging Their Attorneys' BillsThe article about lawyers billing clients for hours of work that AI did in seconds generated quite a response. One law firm even called a staff meeting.
