Investing.com -- US stocks were mostly lower Thursday as traders weighed disappointing retail sales data and more strong earnings from the banking sector.
At 12:57 ET (17:57 GMT), the {{169|Dow Jones Industrial Average} fell 15 points, or 0.1%, the S&P 500 index gained 0.1%, and the NASDAQ Composite fell 0.3%.
The main Wall Street indexes had recorded strong gains on Wednesday, helped by benign inflation data and strong bank earnings. Investors also welcomed a U.S.-brokered ceasefire deal between Israel and Hamas, which heralds cooling geopolitical tensions in the Middle East.
Retail sales disappoint
US retail sales increased at a slower-than-anticipated month-on-month rate in December, in the latest data point that could paint a picture of the state of the American economy heading into the new year.
Retail sales grew by 0.4% last month, decelerating from an upwardly revised pace of 0.8% in November, and below the 0.6% expected.
Elsewhere, the number of Americans filing for unemployment benefits ticked up by more than expected to 217,000 in the week ending on January 11, rising from an upwardly revised mark of 203,000 in the previous week.
This economic weakness has taken some of the gloss from the prior session's healthy gains after consumer prices showed inflation unexpectedly eased in December, albeit slightly. The core CPI in particular read slightly lower than expected, while the headline figure was in line with expectations.
The data sparked some bets that cooling inflation will invite more interest rate cuts from the Federal Reserve, especially after the producer price index, released on Tuesday, read lower than expected.
Markets are still pricing in about two rate cuts this year, half of the four initially projected for the year. Higher-for-longer rates signal some pressure on risk-driven assets in the coming months.
Treasury yields fall as Fed's Waller touts rate cuts in H1
Federal Reserve governor Christopher Waller welcomed recent data showing slowing inflation, saying that if the trend continues, then it is "reasonable to think rate cuts could come in the first half of the year."
Treasury yields fell sharply, with the 1United States 10-Year yield down 5 basis points to 4.6%.
Bank earnings continue
The banking sector will remain in focus Thursday after more solid quarterly earnings.
Morgan Stanley (NYSE:MS) stock rose over 2% after its profit increased in the fourth quarter, fueled by a wave of dealmaking for the investment bank.
Bank of America (NYSE:BAC) stock fell more than 2% even as the scond-largest US lender reported higher profit as its investment bankers capitalized on resurgence in dealmaking in the fourth quarter.
These numbers followed buoyant returns from several of their peers on Wednesday.
JPMorgan Chase (NYSE:JPM) posted an all-time high annual profit underpinned by a fourth-quarter recovery in markets, while Goldman Sachs (NYSE:GS) logged its best-ever quarterly income, Wells Fargo's (NYSE:WFC) bottom-line figure topped estimates, and Citigroup (NYSE:C) swung to a profit.
(Peter Nurse, Ambar Warrick contributed to this article.)