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US Stocks are little changed on Friday after another hot inflation report stoked fears that Federal Reserve rate cuts may not arrive until later than anticipated this year.
The S&P 500 and Dow Jones Industrial Average teetered around the flatline, while the Nasdaq Composite slid 0.2%. The producer price index for January increased 0.3%, while core PPI rose 0.5%, higher than expectations.
The 10-year Treasury yield jumped above 4.3%, and the 2-year Treasury yield topped 4.7%, the highest since December. The week has been a roller coaster for stocks, with investors carefully assessing the direction of the U.S. economy and when the Federal Reserve may decide to lower rates.
The Dow posted its biggest daily decline in nearly a year after January’s headline consumer price index reading came in at 3.1%, higher than the 2.9% economists polled by Dow Jones were expecting.
The market shook off the report the next two days, with the S&P 500 rebounding on Thursday to close at yet another record high. Investors should brace for more near-term volatility ahead, as most investors were confident that rate cuts would start in the first half of the year.
The seesaw market is reflective of this tug-of-war between high sticky inflation and strong earnings and other signs of a robust economy, indicating investors believe there’s more growth ahead for stocks.
Stocks have been experiencing a roller coaster week, with investors assessing the direction of the US economy and the Federal Reserve’s decision to lower rates. The Dow experienced its biggest daily decline in nearly a year after January’s headline consumer price index reading was 3.1%.
The S&P 500 rebounded on Thursday, but Friday’s wholesale inflation report added to concerns that the Fed may delay rate cuts until later in the year. The seesaw market reflects the tug-of-war between high sticky inflation and strong earnings, indicating more growth for stocks. The S&P 500 is down 0.1% for the week, while the Dow is set for a 0.1% gain.
