By Yasin Ebrahim

Investing.com – The S&P 500 was marginally higher Wednesday, as data showing inflation hitting the fastest pace in decades, which was largely expected, failed to spook investors.

While the Nasdaq rose 0.2% or 44 points, it fell 0.1% (0.1%), and the Nasdaq also gained 0.2%.

In December, the consumer price index rose 0.6%, which was just below expectations of a 0.5% rise. This brought the December year-on-year increase in prices to 7%. It is the fastest rate since 1982.

However, deeper analysis of the report revealed that sticker prices, especially in the service sector, increased less than anticipated, fueling early hope for a cooling trend.

“[C]Ore services saw a 0.3% increase, their slowest rate of growth since September. Housing inflation did not accelerate as we expected, and price increases slowed in travel categories,” {{Jefferies said in a note}}.  

But even if price pressure ease in “three months, or six months from now that’s not going to move the dial in time for the Fed to start making changes to how they’re thinking about tapering or rate hikes,” Johan Grahn, head of ETF Strategy at Allianz (DE:) told Investing.com in an interview on Wednesday.

The inflation report continued to cause Treasury yields to fall, and the 10-year backing fell further from 1.8%. This opens the door for a continuing recovery in tech.

Alphabet (NASDAQ 🙂 led big tech. However, Meta Platforms, NASDAQ :, was the exception and was down over 1%.              

Tesla (NASDAQ) meanwhile jumped 4.4% per day following a Morgan Stanley price increase to $1,300/share from $1,200.

A fall in health care kept a lid on gains in the broader market following a more than 7% slump in Biogen (NASDAQ:) after Medicare said it planned to only cover the company’s Alzheimer’s drug, Aduhelm, for patients enrolled in approved clinical trials.

PayPal (NASDAQ:), meanwhile, slipped 2% after {{PayPal (NASDAQ): fell 2% following a downgrade by 0|Jefferies downgraded the company to a hold from buy and cut its price target on the stock  to $200 From $255, citing a cautious fundamental backdrop in 2022.

After a greater-than-anticipated drawdown in weekly crude oil inventories, energy prices remained flat. Energy prices will likely “continue to surge- as demand from economic reopening and reflation collides with a cold snap and tight supply in the Northeast region,” Janney Montgomery Scott said in a note. “We remain bullish on prices- and expect targets toward the $85-90 range in 2022.”