US benchmark equity indexes closed higher Wednesday, while Treasury yields plunged as traders parsed the latest consumer inflation report and earnings from major banks.

The Nasdaq Composite jumped 2.5% to 19,511.2, while the S&P 500 rose 1.8% to 5,949.9. The Dow Jones Industrial Average advanced 1.7% to 43,221.6. Barring consumer staples, all sectors closed higher, led by consumer discretionary.

In economic news, US consumer inflation accelerated in December both sequentially and annually, while core measures came below Wall Street's estimates, according to government data.

On Tuesday, official data showed that US producer price growth unexpectedly decelerated on a sequential basis last month.

"There's still more inflation-fighting work for the (Federal Reserve) to do, which is why it has shifted plans to more slowly reduce the still-restrictive federal funds rate," BMO Capital Markets said Wednesday. "It will stand pat later this month, and may not resume cutting rates until it gets some clarity on the inflation pass-through of the tariffs that could begin rolling out next week."

President-elect Donald Trump is scheduled to take office Monday.

US economic activity rose "slightly to moderately" in late November and the final month of 2024, though there were concerns regarding a potential hit to the economy from changes in immigration and tariff policies, the Fed said in its latest Beige Book released Wednesday.

New York manufacturing activity posted a surprise drop into contraction territory in January as orders and shipments plunged, the New York Fed reported.

Separately, New York Fed President John Williams expects inflation to "gradually" drop to policymakers' 2% target in the coming years. "While I expect that disinflation will progress, it will take time, and the process may well be choppy," he said.

The US 10-year yield slumped 13.5 basis points to 4.65% Wednesday, while the two-year rate lost 9.5 basis points to 4.27%.

In company news, JPMorgan Chase (JPM), Goldman Sachs (GS), and Citigroup (C) reported fourth-quarter financial results that topped the Street's views. Goldman shares jumped 6%, the top performer on the Dow, while Citigroup rose 6.5%, among the best performers on the S&P 500. JPMorgan gained 2%.

Lululemon Athletica (LULU) saw the biggest drop on the Nasdaq and the S&P 500, down 3.1%.

The United Airlines (UAL) Teamsters union said it will resume negotiations with the carrier this week. The airline's shares fell 2.5%, among the steepest declines on the S&P 500.

West Texas Intermediate crude oil soared 3.9% to $80.51 a barrel.

Gold rose 1.4% to $2,719.80 per troy ounce, while silver surged 4.1% to $31.61 per ounce.