Meanwhile, President-elect Donald Trump's team is considering a month-by-month rollout of promised tariff increases rather than imposing higher levels in a single move, Bloomberg reported, in a bid to help prevent inflation spikes.
The likelihood that Trump's policies will pump up price pressures has been worrying markets, as that could limit the Federal Reserve's scope for cutting interest rates. But gradual tariffs could still be "problematic" for the central bank's efforts to finish the job of cooling inflation, a UBS strategist said.
Amid the tariff report, the dollar (DX-Y.NYB) retreated after a five-day winning streak, while the 10-year Treasury yield (^TNX) continued to hover around 14-month highs.
Dow Market Close: Dow Rises, Nasdaq Falls
US stocks closed mixed in what became a bumpy trading day on Wall Street.
The benchmark S&P 500 (^GSPC) finished the session about 0.1% higher, while the tech-heavy Nasdaq Composite (^IXIC) dropped around 0.2%. The Dow Jones Industrial Average (^DJI) moved roughly 0.5% higher to cap off back-to-back winning days for the blue-chip index.
Earlier on Tuesday, producer prices showed signs of relief in the fight to curb inflation. Investors will now turn their attention to Wednesday's critical CPI report, set for release at 8:30 a.m. ET.
Here Comes the CPI Report
December's Consumer Price Index (CPI) will serve as the latest test of whether an inflation resurgence is a risk to the US economy as investors debate if and when the Federal Reserve will cut interest rates in 2025.
The report, set for release at 8:30 a.m. ET on Wednesday, is expected to show headline inflation of 2.9%, an uptick from November's 2.7% annual gain in prices. Consumer prices are expected to have risen 0.4% over the prior month, also ahead of the 0.3% monthly increase seen in November.
Seasonal factors like higher fuel costs and continued stickiness in food inflation are widely expected to keep the headline figures elevated.
On a "core" basis, which strips out the more volatile costs of food and gas, prices in December are expected to have risen 3.3% over last year for the fifth consecutive month. Economists expect monthly core price increases to also match the prior month's reading of 0.3%, according to Bloomberg data.
"Inflation appears to have stalled moderately above the Fed's target," Bank of America economists Stephen Juneau and Jeseo Park wrote in a preview of the report.
Bitcoin Rises to Trade Around $97K
Bitcoin (BTC-USD) edged higher on Tuesday as the cryptocurrency looked to stage a comeback after prices have fallen roughly 4% over the past month.
In mid-afternoon trade, the largest cryptocurrency ticked up about 5% to trade at around $97,000 a token. The last time bitcoin prices traded above the critical $100,000 level was Jan. 7.
Smaller cryptocurrencies like Ethereum (ETH-USD) rose in tandem, jumping over 6% to trade above $3,200 a coin.
Focus Turns to CPI Inflation Report
US stocks closed mixed Tuesday as investors took in the first of two key inflation reports this week, which showed prices rose less than expected in December. Also in focus was a report that the incoming Trump administration could hike tariffs more gradually to ease inflationary pressures.
Investors will now turn their attention to Wednesday morning's update on consumer prices, which are expected to remain sticky as the Federal Reserve continues its inflation fight.
On Tuesday, the benchmark S&P 500 (^GSPC) finished the trading day about 0.1% higher, while the tech-heavy Nasdaq Composite (^IXIC) dropped around 0.2% following a bumpy session on Wall Street. The Dow Jones Industrial Average (^DJI) moved roughly 0.5% higher to cap off back-to-back winning days for the blue-chip index.
The Producer Price Index, which tracks price changes companies see at a wholesale level, rose 3.3% over last year, up from 3% in November but less than economists expected. It rose 0.2% over the previous month, also less than expected. The report lays the groundwork for Wednesday's heavily anticipated CPI print.
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