PARIS (Reuters) – The New York Stock Exchange rose at the opening on Thursday despite a stronger-than-expected CPI inflation figure in the United States.

In early trading, the Dow Jones index gained 100.44 points, or 0.11% to 37,797.53 points, and the broader Standard & Poor’s 500 rose 0.26% to 4,794.54 points. The Nasdaq Composite takes 0.34% or 51.31 points, to 15,029.604.

CPI inflation reached 3.4% year-on-year in December, compared to 3.1% in November and a consensus of 3.2%.

The surprise on price dynamics is bad news for the markets, already faced last Friday with a monthly report on American employment that was stronger than expected.

These two indicators raise fears that the Federal Reserve will maintain its rates at their current levels during its March meeting, while the markets judged about 70% likely a cut during this meeting, before the publication of the indicator .

Such a decision would go against the central scenario of investors who supported risky assets last year, that of a rapid and painless decline in inflation which would allow the central bank to significantly loosen monetary conditions in 2024 .

However, housing is overweighted in the calculation of CPI inflation compared to that of PCE inflation, the indicator on which the Fed bases itself to judge the effectiveness of its monetary policy, but this expenditure item represents the half of Thursday’s surprise.

In values, Citigroup fell 2.2% after recording around $3.8 billion in combined charges and provisions which will weigh on its results in the fourth quarter.

(Written by Corentin Chappron, edited by Sophie Louet)

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