Banking Profits Surge Amidst Modest Inflation Rise

Wall Street expects a robust opening as core inflation rose less than anticipated, aligning bank profits with expectations. Major banks like JPMorgan and Wells Fargo reported significant Q4 profits, boosting stock futures. Meanwhile, core consumer prices rose 3.2%, slightly below forecast, easing inflation concerns.

Wall Street's leading indexes are poised for a positive start on Wednesday following encouraging data on core inflation and a strong set of quarterly results from major banks. By 8:54 a.m. ET, futures on the Dow, S&P 500, and Nasdaq showed notable gains, promoting an optimistic market sentiment.

While the overall consumer price index escalated by 2.9% in December, core CPI figures showed a rise of 3.2%, slightly undercutting the expected 3.3%. This has shifted traders' expectations, predicting a more significant rate cut by the central bank than previously anticipated.

Highlighting the financial sector's robust health, JPMorgan, Wells Fargo, and Goldman Sachs reported higher than expected Q4 earnings, propelling their stocks upward. The S&P 500 Banking Index's continued strength reflects this optimism against a backdrop of anticipated policy changes from the U.S. administration.

(With inputs from agencies.)