Markets Rebound as Inflation Data Signals Potential Slowdown

NEW YORK, N.Y. — U.S. stock markets rebounded from session lows on Tuesday as traders reacted to the latest Producer Price Index (PPI) data, which suggested a potential slowdown in inflationary pressures. The PPI rose by 0.2% month-over-month in December, slightly below the analyst consensus of 0.3%. Core PPI, which excludes volatile food and energy prices, remained unchanged, defying expectations of a 0.3% increase.

The data comes ahead of Wednesday’s highly anticipated Consumer Price Index (CPI) report, where analysts predict the Inflation Rate will decline from 2.9% in November to 2.7% in December. The Core Inflation Rate is expected to hold steady at 3.3%.

Most market sectors saw gains during the trading session, with healthcare stocks being the notable exception, facing significant pressure. The S&P 500 avoided settling below the 5,830–5,840 support level and is now approaching recent highs near 5,885. A breakthrough above this level could test resistance at 5,910–5,920.

Tech stocks also saw a boost, with the NASDAQ Composite rising 6.1% as traders capitalized on recent pullbacks to increase positions. The index is attempting to settle above the 20,750–20,800 resistance level, with a move beyond 20,950 potentially pushing it toward 21,150–21,200.

Meanwhile, the Dow Jones Industrial Average gained ground, driven by strong performances in industrials and financial stocks. The index is holding above the 50-day moving average at 42,490, with resistance levels at 42,700–42,800. A drop below 42,300 could test support at 42,100–42,200.

Vladimir, an independent trader and analyst with over a decade of experience, noted, “The market’s reaction to the PPI data reflects cautious optimism about easing inflation. However, all eyes are now on the CPI report for clearer signals.”