On Wednesday, stocks saw minor increases in two main indexes, despite disappointing economic data and unsettling comments from the president-elect.

The S&P 500 ended the day with a 0.2% increase, while the Dow Jones Industrial Average rose by 0.3%. In contrast, the tech-focused Nasdaq dropped by 0.1%. Bitcoin’s price fell by nearly 3%, remaining under the $100,000 mark.

Stocks edged higher as investors disregarded a day filled with mostly negative economic updates.

The Federal Reserve published minutes from its December meeting, indicating concerns about persistent inflation. The document highlighted “recent elevated inflation readings” and a “high degree of uncertainty” regarding emerging economic data. Inflation has been on the rise for two consecutive months.

Notably, the word “uncertainty” appeared nine times in the Fed minutes, which does not provide much reassurance for analysts.

“Inflation is the unpredictable factor in 2025. There are many potential risks that could push inflation higher,” commented Charlie Ripley, a senior investment strategist at Allianz Investment Management, in a conversation with Reuters.

Earlier, a report from ADP, a payroll processing company, indicated that job creation slowed down in December, along with a decline in wage growth.

“The labor market experienced a shift to a more moderate growth rate in the final month of 2024, reflected in slower hiring and wage increases,” noted Nela Richardson, chief economist at ADP.

In addition, there was a CNN report suggesting that President-elect Donald Trump may declare a “national economic emergency,” which could empower him to impose import tariffs. Such a declaration could enable him to levy taxes on imports more freely.

This news alarmed investors, who are already cautious about unexpected shifts in the economy as Inauguration Day approaches.

Tariffs could lead to increased prices for U.S. consumers, potentially igniting further inflation. Meanwhile, investors seem to be losing faith that the Federal Reserve will reduce interest rates in their upcoming January meeting. A combination of higher interest rates and inflation could pose significant risks to the economy.

Almost all analysts anticipate that the Federal Reserve will maintain current interest rates in January, following a series of cuts last year.

The stock market will be closed on Thursday in observance of a national day of mourning for the recently deceased President Jimmy Carter.

Source: Reuters