US Stock Market: S&P 500 rises today on easing inflation concerns and improved sentiment on Wall Street.

• The stock market is reacting today to lower inflation and interest rates.
• The S&P 500 and Nasdaq are attempting to close out a volatile week higher today.
• Bitcoin is stable today while Wall Street adjusts its bets on the Fed.

U.S. stocks were trading slightly higher on Friday, attempting to close out a volatile week marked by a recent losing streak that was interrupted the previous day. The movement reflected a combination of signs of more moderate inflation and less tension surrounding the issue of artificial intelligence, which helped sustain risk appetite at the end of the week.

At the start of trading, the S&P 500 was up nearly 0,4%, while the Nasdaq Composite rose around 0,5%, seeking to continue the momentum seen on Thursday. The Dow Jones Industrial Average also posted a more restrained gain, close to 0,3%, mirroring the more positive tone in the main indices.

The backdrop to the session was a week in which the economic data agenda suffered delays, but without changing, for now, the market's reading on interest rate cuts next year. Investors received the November employment and consumer inflation reports relatively constructively, despite their late arrival, although some economists pointed out reservations about the reliability of some figures.

The inflation data released on Thursday was the main fuel for the more favorable mood. The Consumer Price Index (CPI) indicated a greater-than-expected slowdown, fueling the perception that price pressures may be losing strength. At the same time, observers highlighted limitations in data collection, amid the federal government shutdown, and reinforced that future readings, such as that of January, tend to offer a clearer picture of the inflationary pace.

With inflation cooling and signs of a less heated labor market, expectations that the Federal Reserve will maintain its course of monetary easing have gained traction again. Most bets still focus on two cuts next year, but in recent days, part of the market has begun pricing in the possibility of further reductions.

Furthermore, Friday's session coincided with the release of the final results of the University of Michigan's consumer sentiment index. The preliminary reading for December had already shown an improvement in the indicator for the first time in five months, and the final data was seen as another piece to calibrate perceptions about consumption and inflation.

Michaël van de Poppe's analysis of Japanese interest rates and Bitcoin.

In reading analyst Michaël van de Poppe (@CryptoMichNL), The interest rate hike in Japan is likely to have a more limited effect than some in the market had been suggesting. According to him, although the increase by the Bank of Japan is a significant event, investors were already expecting the decision, which reduces the chance of surprises in the short term.

Van de Poppe states:

“The Bank of Japan has raised its interest rates. Breaking news! However, the markets already knew this, so the real impact of this interest rate increase is: – First, it will be smaller the more increases occur, since the marginal impact on Carry Trade is decreasing more and more. – Second, as everyone already knew, the markets overvalued this increase before the event, expecting a large drop. That has now passed and, considering the slight inflation, it's time to return to the fair price of #Bitcoin.”

At the time of publication, Bitcoin was trading at US$87.965,82, with no gains for the day.