Belfast Telegraph

US stocks see little movement ahead of Trump inauguration

US stocks have showed little movement as investors wait to see the impact of Donald Trump's inauguration as president.

The Standard & Poor's 500 remained at a near standstill on Wednesday, the ninth day in a row that it has moved by less than 0.4% up or down.

The S&P 500 rose 4 points, or 0.2%, to 2,271.89 while the Dow Jones industrial average slipped 22.05 points, or 0.1%, to 19,804.72.

The Nasdaq composite index added 16.93, or 0.3%, to 5,555.65. Slightly more stocks rose on the New York Stock Exchange than fell.

Stocks have been in a wait-and-see period in recent weeks.

The S&P 500 is up 6.2% since Mr Trump's surprise victory, driven higher by expectations for lower corporate taxes and less regulation.

Mr Trump will take the oath of office on Friday, and investors are waiting to see how much of his campaign-trail rhetoric will become government policy.

"It's natural after such a remarkable run post election to have a bit of a flat, quiet period as investors wait for some more tangibles," said Katie Nixon, chief investment officer at Northern Trust Wealth Management.

"We know directionally where Donald Trump wants to go, and with a Republican Congress he's got a higher probability of success than otherwise, but we don't have the details."

One notable area of weakness in the stock market was retail.

The Christmas holiday shopping season was weaker than many traditional retailers were expecting, and Target became the latest to cut its forecast for fourth-quarter sales and profits as a result.

Target had the second-largest loss in the S&P 500, while Dollar Tree and other retailers were not far behind.

Treasury yields rose sharply. The yield on the 10-year Treasury note climbed to 2.42% from 2.33% late on Tuesday.

It more than made up its loss from the prior day, and continues the steady march higher that bond yields have been on since election day.

Expectations of higher inflation, along with faster economic growth, have driven the trend.

Consumer prices last month were 2.1% higher than the same time a year earlier, according to a Labor Department report released on Wednesday. Economists say the inflation rate is still relatively modest, but it is a clear acceleration from the very low levels of the last four years.

The Beige Book, a survey of conditions by the Federal Reserve released on Wednesday afternoon, showed that the US economy grew a bit faster at the end of last year and that pricing pressures "intensified somewhat" since its last report in November.

The Federal Reserve has raised interest rates twice in the last two years, up from their record low of nearly zero.

The central bank has said that it plans for a gradual rise in rates. Fed chairwoman Janet Yellen said in a speech on Wednesday that officials expect to raise rates "a few times a year" through 2019 but a big push higher in inflation could force the Fed's hand.

AP

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