Wall Street today: US stocks snap three-day losing streak, Treasury yields fall after inflation data; Tesla up 6%

Wall Street Today: A gauge of global stocks climbed on Thursday for the first time in three sessions while U.S. Treasury yields dipped as an inflation reading fueled expectations the Federal Reserve’s preferred measure of prices might be cooler than anticipated.

The Labor Department said the producer price index (PPI) for final demand rose 0.4% last month after an upwardly revised 0.5% gain in December, topping the estimate of economists polled by Reuters for a 0.3% rise. The data comes on the heels of Wednesday’s consumer price index (CPI), which showed its largest acceleration in nearly 1-1/2 years.

But components of the PPI data that are part of the personal consumption expenditures (PCE), which Fed Chair Jerome Powell said on Wednesday is the Fed’s preferred targeted inflation measure, were soft and added to hopes the PCE reading may be cooler than currently expected.

“It was a bit of relief to see the components that feed into PCE were better than expected. I was also pleased to see that the anticipation of tariffs isn’t showing up yet in the data,” said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.

“We could see those prices move up when we get the February data in March, but at least in January businesses weren’t trying to front-run tariffs with their prices.”

On Wall Street, U.S. stocks were higher after the inflation data, with the Nasdaq up more than 1%. Consumer discretionary led all S&P sectors higher, lifted by a rise of about 6% in Tesla and a surge of almost 14% in MGM Resorts after the casino operator reported better than expected quarterly earnings.

The Dow Jones Industrial Average rose 101.88 points, or 0.23%, to 44,472.79, the S&P 500 rose 33.71 points, or 0.56%, to 6,085.68, and the Nasdaq Composite rose 189.02 points, or 0.97%, to 19,839.59.  MSCI’s gauge of stocks across the globe rose 6.46 points, or 0.74%, to 879.24 and was on track for its biggest daily percentage gain since February 4.

In Europe, the pan-European STOXX 600 index rose 0.93% for its sixth straight session, hitting an intraday record, buoyed by gains in Nestle and Siemens after their quarterly results, as well as hopes for talks to end the war between Russia and Ukraine.

U.S. President Donald Trump said on Wednesday that both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy expressed a desire for peace in separate phone calls with him on Wednesday, and Trump ordered top U.S. officials to begin talks on ending the war.

The yield on benchmark U.S. 10-year notes fell 9.1 basis points to 4.543%, on track for its biggest daily drop in a month. Aside from the PPI data, U.S. initial jobless claims fell 7.000 to a seasonally adjusted 213,000, slightly below the 215,000 and indicating the job market remains on stable footing.

Still, expectations for a rate cut from the Fed continue to be pushed back this year, with the market not pricing in a chance of more than 50% for a cut of at least 25 basis points until September, according to CME’s FedWatch Tool.

The dollar index, which measures the greenback against a basket of currencies, fell 0.48% to 107.39 and was on track for its biggest one-day percentage drop since January 24, with the euro up 0.47% at $1.0431.

Croatian policymaker Boris Vujcic said the European Central Bank could cut interest rates three more times this year even if its U.S. counterpart moves more slowly, but policy easing would be predicated on a rapid fall in underlying inflation.

Against the Japanese yen, the dollar weakened 0.72% to 153.31. Sterling strengthened 0.58% to $1.2515. Britain’s economy unexpectedly grew by 0.1% in the final quarter of last year, official figures showed, topping the estimate envisaging a contraction of 0.1%, though longer-term challenges remain.

Oil prices fell on the potential for a deal between Russia and Ukraine, while rising crude inventories also exerted downward pressure. U.S. crude fell 0.49% to $71.02 a barrel and Brent fell to $74.76 per barrel, down 0.57% on the day.