Stocks are regaining some of Tuesday’s lost ground midway through the week. So why are stocks up today?
Well, after yesterday’s inflation-fueled selloff, it appears the bulls are back on parade this Valentine’s Day. Indeed, both the S&P 500 and Nasdaq Composite are in the green heading to the bell, up 0.3% and 0.5%, respectively.
Ride-sharing company Lyft (NASDAQ:LYFT), is leading the winners today. LYFT stock is up 34% at the time of writing after beating earnings expectations at its fourth-quarter earnings call. Though, some of today’s gains may be the result of an admittedly comical typo. In a press release, Lyft accidentally announced it expects its profit margins to increase 500 basis points, or five percent, in 2024, which the company later clarified to 50 basis points or 0.5%.
LYFT stock surged more than 45% in after-market trading, touching a new all-time high as investors reacted to the erroneous guidance figure. While it has since returned some of those misleading gains, it’s held onto the lion’s share.
Interestingly, both Lyft and Uber (NYSE:UBER) drivers are on a Valentine’s Day strike today, protesting worsening pay and safety conditions. However, it doesn’t seem to be weighing on investors too heavily. UBER stock is also up big today, in the green, by about 13%.
Why Are Stocks Up Today?
Today’s uptick could simply be viewed as a technical bounce-back from Tuesday’s surprise drop. Indeed, all major stock indices fell Tuesday after the January Consumer Price Index (CPI) fell short of expectations. The S&P lost 1.3%, while the Nasdaq dropped about 1.8% following the disappointing inflation reading.
Reasonably so, headline inflation came out to 3.1% year-over-year in January, while the core CPI, which excludes the volatile Food and Energy categories, was virtually unchanged from December at 3.9%. Economists were expecting headline inflation to slow to a 2.9% annual rate, with core inflation easing to 3.4%.
Stubborn inflation points to a higher likelihood the Federal Reserve will opt not to cut rates at the March and May policy meetings. This is likely what had Wall Street down in the dumps Tuesday.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
