US stocks recovered from earlier losses on Thursday to end the session mostly flat after a new December inflation reading came in slightly hotter than economists had expected, raising new questions about the Federal Reserve's path on interest rates.
The S&P 500 (^GSPC), which fell 0.8% during the session, closed just below the flat line. The Dow Jones Industrial Average (^DJI) and Nasdaq Composite Index (^IXIC) are hovering slightly above breakeven.
Interest rate-sensitive sectors lagged the most, with real estate and utility stocks ending the session lower.
Stocks struggled this week as investors counted down to the US consumer inflation reading for December. This reading showed a slightly larger jump than expected, as prices rose by 0.3% on a monthly basis and 3.4% on an annual basis. On a “core” basis, which excludes volatile food and energy categories, inflation rose 3.9% over the past year.
This reading was considered crucial for traders who have been increasingly calculating the odds of a “soft landing” – where inflation falls to 2% without an economic contraction – since the last CPI report.
Meanwhile, US Bitcoin ETFs (full list here) began trading on Thursday after the Securities and Exchange Commission gave regulatory approval on Wednesday.
Bitcoin (BTC-USD) held more than $46,000 per token, while rival ethereum (ETH-USD) jumped amid bets that the second-largest token is next to get the ETF's green light.
Ahead of its quarterly financial update on Friday, Citigroup (C) said it would take more than $3 billion in reserves and one-time expenses into the results. Q4 earnings season is crucial for stocks, given their poor performance so far this year.
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