US stocks fall as investors digest impact of hot inflation data on Fed outlook
US stocks traded mixed on Friday following a slate of economic data in the week.
Investors took in two hotter-than-expected inflation reports.
Markets and industry veterans still expect the Fed's first rate cut to come in June.
US stocks traded lower on Friday, with investors assessing the outlook for Federal Reserve policy in light of two hotter-than-expected inflation reports this week.
On Tuesday, the Bureau of Labor Statistics reported that consumer prices accelerated 3.2% year-over-year in February, above consensus estimates for a 3.1% increase. On Thursday, the producer price index saw a similarly unexpected uptick of 0.6%, above the Dow Jones forecast for 0.3%.
Taken together, the readings muddy the "immaculate disinflation" aspiration that has gripped markets over the last several months. Futures markets still expect the Fed to make its first 25-basis-point interest rate cut in June, and economists polled by Bloomberg from March 8-13 agree.
"We are expecting the dot plot to continue to show that the median FOMC participant expects 75 bps rate cuts this year," Anna Wong, Bloomberg chief US economist, said in a report. "In the SEP, the median forecast for neutral rate likely edges higher as at least five FOMC participants had flagged the possibility of higher neutral rate during the inter-meeting period."
The same survey showed that 17% of economists expect a US recession in the next 12 months, while 63% anticipate a soft landing. Twenty-one percent, meanwhile, see a hard-landing, no-recession scenario.
Equity investors in any case have largely shaken off economic fears and have instead focused on the prospect of easing monetary policy. The benchmark index is up 8.6% year-to-date.
"The S&P 500 continues to print new highs as earnings and economic growth point more toward a soft-landing scenario than a recession," said Adam Turnquist, chief technical strategist for LPL Financial. "While inflation data remains more volatile than the market desires, investors appear complacent with the notion of rate cuts being on the horizon, and less concerned over the exact timing."
Here's where US indexes stood as the market opened at 9:30 a.m. on Friday:
S&P 500: 5,125.91, down 0.47%
Dow Jones Industrial Average: 38,828.02, down 0.18% (-68.49 points)
Nasdaq Composite: 16,006.40, down 0.79%
Here's what else is going on:
Weight-loss drugs like Ozempic could be game-changers for the global economy.
Robinhood stock has 64% upside as the crypto market heats up, according to Bernstein.
Tesla could turn around quickly if it gets a "real CEO," investor Ross Gerber said.
Wells Fargo said shares of Tesla could drop 23% in a new downgrade.
A market expert said stocks could gain another 26% through 2026.
In commodities, bonds, and crypto:
Oil prices dipped, with West Texas Intermediate down 0.7% to $80.73 a barrel. Brent crude, the international benchmark, moved lower 0.6% to $84.86 a barrel.
Gold edged lower 0.11% to $2,165.20 per ounce.
The 10-year yield edged slightly higher to 4.31%.
Bitcoin dipped 2.33% to $67,721.
Read the original article on Business Insider
