Investing.com -- Canada's main stock index, the S&P/TSX Composite, and U.S. stocks traded in the red shortly after the open, as investors digested a fall in core inflation in December. Headline consumer prices came in hotter than expected, further pushing out market expectations of rate cuts from the Fed, putting a damper on market sentiment.
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U.S. CPI muddies rate cut waters
The U.S. consumer inflation report for December resulted in a degree of uncertainty on Wall Street Thursday, as the headline U.S. inflation release climbed to 3.4% on an annual basis in December, from 3.1% in November, and more than the 3.2% expected.
However, the so-called "core" measure, which strips out volatile items like food and energy, fell to 3.9%, down from 4.0% in the prior month, but still above the 3.8% expected.
Although the figures were hotter than the market expected, they still indicate that core prices are falling, and thus the Federal Reserve is still likely to be inclined to begin cutting interest rates this year.
SEC approves first spot Bitcoin ETFs
Bitcoin was trading up over 8% on Thursday morning, after the top U.S. securities regulator approved the first exchange-traded funds tracking the spot price of the cryptocurrency.
In a decision that is anticipated to have sweeping implications for the wider crypto industry, the U.S. Securities and Exchange Commission gave the green light on Wednesday to 11 applications from a range of issuers, including BlackRock (NYSE:BLK) (NYSE:BLK) and Fidelity as well as digital currency asset manager Grayscale.
Some proponents of Bitcoin, the world's most popular cryptocurrency, have claimed that the SEC's approval would spark a rush of demand into the token. Through a spot Bitcoin ETF (TSX:EBIT), investors will have the chance to gain exposure to the digital asset without directly owning it. Detractors have, however, flagged that ETFs could persuade retail traders to pour money into a sector that has been beset with a spate of fraud-related scandals and huge volatility.
The decision, which was backed by SEC Chair and known crypto-skeptic Gary Gensler, marked a U-turn for a commission that has largely been reticent to sign off on a spot Bitcoin ETF for much of the past decade. It also comes after hackers temporarily took control of the SEC's account on social media platform X on Wednesday and falsely claimed that the regulator had already approved the applications, sparking wild fluctuations in the price of Bitcoin.
Google announces lay-offs across multiple teams - reports
Alphabet's (NASDAQ:GOOGL) Google is dismissing hundreds of its employees across several divisions to decrease costs and support an ongoing push into artificial intelligence, according to media reports.
Citing a Google spokesperson, the reports said the lay-offs will impact workers at the search giant's core engineering division. Hundreds of roles at its Voice Assistant division, as well as the hardware team behind its Pixel phone, Nest smart home devices, and Fitbit watches, will be eliminated.
The exact number of employees losing their jobs was not immediately specified by Google, the reports said.
Google's cuts extend a continuing trend of job reductions in the tech industry. On Wednesday, e-commerce group Amazon (NASDAQ:AMZN) (NASDAQ:AMZN) reportedly laid off several hundred employees at its live-streaming unit Twitch, Prime Video service and MGM studios.
Citigroup in danger of quarterly loss
The fourth-quarter earnings season starts in earnest on Friday, with results due from a series of banking giants, including Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM).
Ahead of that, Citigroup (NYSE:C) stock fell 2.5% after the bank warned that its fourth-quarter results will be hit by $880 million in currency conversion losses from Argentina’s currency and another $780 million from restructuring moves.
KB Home (NYSE:KBH) stock fell 2.3% after the homebuilder disappointed with its fourth-quarter results, as the average selling price for its properties fell 4.5% during the quarter.
On the flip side, Alphabet (NASDAQ:GOOGL) stock rose 1.8% following media reports that the tech giant’s Google unit is dismissing hundreds of its employees across several divisions to decrease costs and support an ongoing push into artificial intelligence.
In other developments, the U.S. Securities and Exchange Commission (SEC) approved rule changes on Wednesday, paving the way for the creation of Bitcoin exchange-traded funds (ETFs). This eagerly awaited decision is set to provide investors with broader access to the leading cryptocurrency.
Iran seizes oil tanker
Oil prices rose Thursday, rebounding after the previous session’s weakness as attacks on shipping through the Red Sea (NYSE:SE) persisted, with Iran boarding an oil tanker.
Both benchmarks settled lower on Wednesday after official data showed an unexpected weekly build of 1.3 million barrels in U.S. inventories, contrasting with earlier industry data that signaled a draw.
While the build was minimal, the data also showed a second straight week of large product inventory builds, pointing to weakness in U.S. fuel demand. This notion was exacerbated by a severe winter storm on the east coast of the country, which further disrupted road travel in the world’s largest fuel consumer.
However, the market remained supported by ongoing concerns about disruptions to Middle East supplies, especially after Iran seized a tanker with Iraqi crude destined for Turkey on Thursday, a move likely to stoke regional tensions.
(Oliver Gray contributed to this article.)I