Stock Market Update Wednesday January 15, 2025

Stock Market Update Wednesday January 15, 2025 The conditions for a snapback rally have been developing, as previously mentioned. On Monday, the VIX spiked near 22, which lowered investor sentiment, and the S&P 500 (SPX) experienced a 5% drop from its recent highs. This set the stage for a potential sharp rebound if positive news emerged.

Today, a cooler-than-expected CPI report, following yesterday's softer PPI data, led to a drop in Treasury yields (the 10-year yield is now at 4.65%, and TLT rose by 1.7%).

The rally gained further strength from stronger-than-expected earnings reports from major financial firms. Citigroup (C) rose by 6.5%, Wells Fargo (WFC) increased by 6.7%, and Goldman Sachs (GS) climbed by 6%, all significantly surpassing consensus expectations (which were for moves of 3% to 4%). JPMorgan (JPM) also increased by 2%, in line with options market predictions.

Overall, the positive sentiment was reflected in broader indices: the S&P 500 (SPX) closed up by 1.8%, while the Nasdaq 100 (QQQ), which had underperformed in recent sessions, outperformed with a strong gain of 2.3%.

VIX Volatility Index Daily Chart

The Core Consumer Price Index (CPI) increased by 0.2% from the previous month, which is slightly lower than the expected increase of 0.3%. This result aligns with market predictions. As a result, bond yields have dropped significantly, with the 10-year Treasury yield decreasing, and the US Dollar Index (DXY) falling as well.