US stocks rise as investors assess retail sales and new inflation data

• US stocks rose Wednesday following the release of December retail sales and wholesale inflation data.
• December retail sales fell 1.1%, dropping by more than anticipated, while wholesale inflation also dropped.

US stocks edged higher Wednesday as investors sorted through a drop in both December retail sales and wholesale inflation to gauge the next steps in monetary policy by the Federal Reserve.

Alongside fresh economic data, investors were watching Microsoft following multiple news reports the software maker was set to announce layoffs for thousands of employees.

In focus were retail sales, with the Commerce Department posting a 1.1% decline in December. US consumers pulled back on spending in department stores, vehicles, and at restaurants and bars in the face of still-hot inflation. Economists polled by Bloomberg had expected a fall of 0.6%.

Inflation on the factory level fell by more than anticipated. The PPI reading declined 0.5% month over month in December compared with expectations of a 0.1% fall.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Wednesday:

• S&P 500: 4,003.65, up 0.32%
• Dow Jones Industrial Average: 33,928.65, up 0.05% (17.80 points)
• Nasdaq Composite: 11,171.40, up 0.69%

Wednesday's figures add to recent reports signaling a slowdown in the world's largest economy and inflation pushing lower although consumer prices overall remain well above the Fed's comfort level. The Fed is expected to raise interest rates again for its February 1 decision.

The retail sales report arrived after last week's December inflation data showing a drop in annual headline inflation to 6.5% but stickiness in core prices as monthly shelter costs rose 0.8%.

"The easing of inflation is an encouraging sign and one that the Fed has acknowledged," said Kavan Choksi, wealth consultant at KC Consulting, wrote in comments to Insider. "The Fed generally gives more weight to PCE (Personal Consumption Expenditure) in evaluating rate policy, with the next PCE report coming at the end of the month. Barring a surprise in PCE data, though, [inflation data] reinforces the likelihood of a 25-basis point hike in February.

Here's what else is happening today:

• A top economist says to expect US home prices to fall another 10%.
• Sam Bankman-Fried says FTX's lawyers overlooked $428 million in cash and the bankrupt crypto exchange can make US customers whole.
• FTX lost $415 million worth of crypto to hackers, its new bosses say.

In commodities, bonds, and crypto:

• West Texas Intermediate crude rose 1.6% to $81.49 per barrel. Brent crude, the international benchmark, rose 1.3% to $87.07.
• Gold gained 0.6% to $1,921.80 per ounce.
• The 10-year Treasury yield fell 7 basis points to 3.44%.
• Bitcoin moved up 0.3% to $21,397.01.