US stocks edges higher after CPI data

The Dow Jones Industrial Average advanced modestly on Thursday post the December’s consumer price data that came as expected, indicating cooling inflation in the United States.

The 30-stock index gained 140 points, or 0.4%. The S&P 500 added 0.1%, while the Nasdaq Composite was little changed.

Fed’s Susan Collins said in an interview with the New York Times Wednesday that she’s leaning toward a smaller, quarter-percentage-point rate hike at the next meeting.

The CPI data showed a 0.1% dip in prices from November but was still 6.5% higher than the prior year. In November, the report showed a 0.1% monthly gain and an annual pace of 7.1%. The CPI, excluding food and energy prices, was also in line with expectations, showing a month-over-month gain of 0.3%. The so-called “core” index was 5.7% higher than a year ago in December.

Stocks rallied in recent sessions as investors bet the CPI data would confirm a weakening inflation trend. Investors have watched in recent months for data signaling cooling inflation in hopes it can give the Fed justification for further slowing interest rate hikes.

The CPI has resulted in a lack of direction in stocks. Investors will also be watching for Fed speakers scheduled on Thursday and Friday including James Bullard. They will also watch for other economic data in the coming weeks such as the employment cost index for further clues into the health of the economy.