At the start of the year, the moderate rise in the US Consumer Price Index (CPI) relieved markets, supporting both stock and cryptocurrency gains.
Moderate CPI Growth and Its Impact
The US Bureau of Labor Statistics announced that the December CPI increased by 2.9% year-over-year. The core CPI, excluding food and energy costs, rose by 3.2% annually and 0.2% monthly, following four months of 0.3% increases. Decreases in restaurant and lodging prices, a slowdown in healthcare service prices, and relatively moderate rent increases helped temper the December figures.
Stock Market Gains
The stable inflation figures led to an active trading environment in US stocks and bonds. The Dow Jones surged over 700 points, and the S&P 500 rose nearly 2%, marking the best single-day performance since November. The yield on 10-year US Treasuries also dropped to 4.65%.
Cryptocurrency Surge
With inflation cooling and renewed optimism for risk assets, cryptocurrencies also surged. Bitcoin surpassed the $100,000 mark again, Ethereum climbed above $3,400, and Solana broke through the $200 barrier, reflecting an optimistic mood across the crypto market.
The moderate inflation growth spurred recovery in stock market and cryptocurrency prices, which bolsters hopes for a Federal Reserve rate cut possibility.
