U.S. stock markets ended the day mostly stable, taking a pause after experiencing their largest percentage increase since November 6 on Wednesday, driven by lower inflation and robust bank earnings.

Investors largely overlooked disappointing December retail sales figures and a rise in weekly unemployment claims that were higher than anticipated.

According to the Commerce Department, retail sales for December increased by 0.4%, falling short of the 0.6% increase predicted by economists surveyed by Reuters. Meanwhile, weekly jobless claims rose by 14,000, reaching a seasonally adjusted total of 217,000, exceeding the expected 210,000 claims for that week as per Reuters’ economists.

The broad S&P 500 index settled down 0.21% at 5,937.34; the Dow Jones Industrial Average dipped 0.16% to 43,153.13; and the tech-heavy Nasdaq fell 0.89% to 19,338.29.

The 10-year Treasury yield decreased to 4.615%, following remarks from Federal Reserve Governor Christopher Waller and Chicago Fed President Austan Goolsbee, who indicated the possibility of additional rate cuts later this year.

In the wake of a strong jobs report released on Friday, economists have started to lower their expectations for rate cuts this year. Bank of America suggested that the cycle of rate cuts may be reversing, with potential for a rate increase ahead.

Banks gain momentum on earnings

Bank stock prices continued to rise as earnings reports came in strong.

Both Bank of America and Morgan Stanley unveiled fourth-quarter results that exceeded analysts’ expectations, buoyed by strong performances from their investment banking divisions. This followed impressive quarterly reports from JP Morgan, Goldman Sachs, Wells Fargo, and Citigroup on Wednesday.

According to Samer Hasn, a senior market analyst at global broker XS.com, the solid earnings from banks are currently fostering optimism about the resilience of both companies and the U.S. economy amidst a higher interest rate landscape.

Other notable stocks

• UnitedHealthcare’s stock fell after the company missed revenue expectations in its first earnings report following the death of executive Brian Thompson.
• TSMC reported a record-setting quarter, driven by AI advancements, and anticipates continued growth. This led to a rise in TSMC shares, positively impacting semiconductor stocks like Nvidia and Broadcom.
• BP saw a slight increase after announcing job cuts, including 4,700 internal roles and 3,000 contractor positions, as part of a cost-reduction strategy.
• Target’s shares declined despite the company raising its sales forecast for the fourth quarter, as investors remained concerned about profit margins.
• American Express shares dipped slightly after the company agreed to pay around $230 million in penalties related to misleading practices regarding how it marketed credit cards and wire services to small businesses.

Trump’s Treasury Secretary nominee

Scott Bessent, the nominee for Treasury Secretary put forward by President-elect Donald Trump, faced tough questioning from the Senate. He expressed support for tariffs, tax reductions, increased sanctions on Russian oil, and advocated for the Federal Reserve’s independence in policy decision-making.

Bessent also stated that he does not see a necessity for a central bank digital currency, expressing a preference for sticking with the U.S. dollar.

Bitcoin crosses a key milestone

Bitcoin surged past the significant $100,000 marker amid reports that Trump is considering a digital currency reserve but fell back below that level by the end of trading.

Initially, Trump had mentioned a strategic reserve for bitcoin, but reports indicate this may have now expanded to include other cryptocurrencies, such as Solana and XRP.

At the close of trading, Bitcoin was down 0.25% at $100,184.70.

(This story has been updated with new information.)

Medora Lee is a reporter covering money, markets, and personal finance.