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U.S. stocks fell on Friday as investors digested this week’s better-than-expected inflation data.
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According to government statistics, consumer prices and producer prices rose more than expected in February.
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Investors continued to dial back expectations for a Fed rate cut in 2024.
U.S. stocks fell on Friday as traders spooked by hot inflation data and continued to backtrack on hopes for a 2024 rate cut. All three benchmark indexes ended lower, but bond yields rose slightly.
The S&P 500 ended its second consecutive week of declines.
Both consumer prices and producer prices rose more than expected this week, with the Consumer Price Index increasing at an annual rate of 3.2% and the Producer Price Index increasing at an annual rate of 1.6%, the Bureau of Labor Statistics reported.
Hyperinflation is the Fed’s main focus, and investors are wondering if the central bank will keep interest rates high for an extended period of time to prevent prices from skyrocketing again, especially as the economy appears to be doing well. I am becoming increasingly concerned that this may not be the case.
“This week’s inflation report was a reminder that normalization is not a straight line and many areas remain under pressure,” Mark Hackett, head of investments at Nationwide, said in a note on Friday.
The Fed’s next policy meeting is just around the corner, with central bankers scheduled to begin a two-day meeting next Tuesday to decide on their next policy actions. According to the CME FedWatch tool, markets are pricing in a nearly 100% chance that the Fed will keep interest rates unchanged this month.
Investors also continued to dial back expectations for rate cuts this year. The market is currently pricing in a 30% chance that the Fed will cut interest rates by 100 basis points or more by December, down from 64% that was priced in a month ago, and the probability of a June rate cut is now 30%. is approximately 1 coin. Throw it away.
Here are the U.S. indices as of Friday’s close at 4 p.m.
Here’s what else is happening today:
In Commodities, Fixed Income and Cryptocurrencies:
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West Texas Intermediate crude oil fell 0.36% to $80.98 per barrel. Brent crude oil, the international benchmark, fell 0.1% to trade at $85.28 per barrel.
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Gold fell 0.19% to $2,157.55 per ounce.
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The yield on the 10-year US Treasury note was almost unchanged at 4.30%.
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Bitcoin rose 0.26% to $70,230.
Read the original article on Business Insider
