Stocks slump after hot inflation print

US stocks slid on Thursday following the release of a hotter-than-expected wholesale inflation print. The reading served as one of the last pieces of data that could sway the Federal Reserve at its policy meeting next week.

The S&P 500 (^GSPC) fell 0.4%, while the Dow Jones Industrial Average (^DJI) declined 0.4%. The tech-heavy Nasdaq Composite (^IXIC) fell 0.5%. Shares of Nvidia (NVDA) and Tesla (TSLA) both fell more than 4%, continuing a slide from the previous session.

February’s Producer Price Index rose 0.6% from last month, higher than an expected increase of 0.3%. Investors were watching whether inflation is cooling fast enough to satisfy Fed policymakers and herald interest rate cuts.

Though the market shrugged off signs of sticky inflation in Tuesday’s CPI report and stuck to their hopes for a policy pivot come summer, that calculus could be changing. According to the CME Group’s FedWatch tool, 40% of traders now expect the Fed to hold at current interest rate levels through June, an uptick from about 25% one week ago.

Meanwhile, retail sales increased 0.6%, coming in short of estimates for a rise of 0.8% but still marking a rebound from a decline in January.

In commodities, oil’s revived rally continued to build after the IEA warned that supply would lag this year and US stockpiles shrank. WTI crude futures (CL=F) traded just above $81 per barrel and touched their highest levels since November, while Brent crude futures (BZ=F) pushed above $85.

On the corporate front, Fisker’s (FSR) shares plunged more than 40% after a Wall Street Journal report that the EV maker is exploring a bankruptcy filing.

Live8 updates

  • How both Biden and Trump got to ‘no’ on the US Steel-Nippon merger

    President Joe Biden and Donald Trump are in agreement: US Steel’s $14 billion sale to Japanese giant Nippon Steel shouldn’t go forward.

    Yahoo Finance’s Ben Werschkul reports:

    The sitting President made his views clear Thursday with a statement from Biden saying “it is vital” for the Pittsburgh steel maker “to remain an American steel company that is domestically owned and operated.”

    Trump recently promised to block the merger “instantaneously” if he wins this November after avoiding comment on the topic for weeks after it was announced in December.

  • Former Treasury Sec. Steven Mnuchin says he’s looking to buy TikTok

    Former Treasury Secretary Steven Mnuchin is putting together a group of investors seeking to purchase TikTok if the social media app’s parent company ByteDance is forced to sell it off.

    Yahoo Finance’s Dan Howley reports:

    Mnuchin made the announcement during an appearance on CNBC’s Squawk Box Thursday.

    “I understand the technology, it’s a great business, and I’m going to put together a group to buy TikTok,” he said.

    While Mnuchin wouldn’t name who he’s working with to potentially buy the platform, he did say that it involves a combination of different investors outside of Big Tech firms.

  • Trending tickers Thursday

    Microsoft (MSFT)

    Microsoft stock was the #1 trending ticker on Yahoo Finance on Thursday. Shares of tech giant hit a record high, rising more than 2% to trade just above $426 per share.

    Year to date the stock is up roughly 15%.

    Robinhood (HOOD)

    Shares of Robinhood Markets rose more than 7% on Thursday after the brokerage platform posted strong growth in assets under custody for February, signaling stock and crypto trading momentum.

    Assets under custody (AUC) increased 16% in February from the previous month to $118.7 billion.

    Fisker (FSR)

    Fisker stock plunged more than 50% on Thursday after The Wall Street Journal reported the EV startup is exploring the possibility of bankruptcy. The report comes two weeks after the company warned about “its ability to continue as a going concern” and announced a 15% headcount reduction.

  • Fed’s cautious approach to cutting rates reinforced by new inflation reading

    Fresh evidence of sticky inflation released Thursday will likely reinforce the Federal Reserve’s cautious approach to rate cuts and could add to questions about whether interest rates will remain elevated for longer than expected in 2024.

    Yahoo Finance’s Jen Jennifer Schonberger reports:

    “Given the stickier than expected nature of inflation, it’s going to be very difficult for the Fed to justify a near-term rate reduction,” Stifel’s Lindsey Piegza told Yahoo Finance Live Thursday. “Our base case is that the Fed holds off to the second half of the year before initiating a change in policy.”

    The new inflation reading Thursday came from the Labor Department’s Producer Price Index, which tracks the prices businesses pay to manufacture products and services.

    The index rose 0.6% from January to February, up from a 0.3% rise the previous month. So-called “core” producer prices, excluding volatile food and energy costs, were up 0.3% month-over-month. The Fed watches core prices closely.

  • Oil gains on falling inventories, drone attacks on Russian refineries

    Oil rose more than 1% on Thursday, adding to the prior session’s gains amid falling inventories and continued drone attacks on Russian refineries.

    On Tuesday, West Texas Intermediate (CL=F) hovered just above $81 per barrel level while Brent (BZ=F), the international benchmark price, traded above $85 per barrel.

    Data from the Energy Information Administration showed a drop in US crude inventories last week.

    Escalating drone attacks on Russian refineries stemming from the Ukraine-Russia war over the past few days have also impacted the oil markets.

  • Stocks roll over on hotter than expected inflation print

    Stocks opened higher but quickly turned negative in early trading.

    The S&P 500 (^GSPC) fell 0.3% while the Dow Jones Industrial Average (^DJI) also declined 0.4%, or about 100 points. The Nasdaq Composite (^IXIC) also slipped below the flatline.

    Nvidia (NVDA) opened lower for the second day in a row. Shares of the chipmaker, along with Tesla (TSLA), dragged stocks lower on Wednesday.

    February’s Producer Price Index rose 0.6%, higher than an expected rise of 0.3%. Investors were watching the print as the last major data point ahead of next week’s key Federal Reserve policy meeting.

  • Stocks slightly higher despite a hotter than expected inflation print

    Stocks edged up on Thursday despite a hotter-than-expected wholesale inflation print.

    The S&P 500 (^GSPC) rose 0.1%, while the Dow Jones Industrial Average (^DJI) rose 0.3%, or over 100 points. The Nasdaq Composite (^IXIC) also gained 0.2%, rebounding from yesterday’s losses.

    Nvidia (NVDA) opened lower for the second day in a row. Shares of the chipmaker, along with Tesla (TSLA), dragged stocks lower on Wednesday.

    February’s Producer Price Index rose 0.6%, higher than an expected increase of 0.3%. Investors were eyeing the print amid expectations that Fed policymakers will reiterate their intention to cut rates sometime this year after next week’s Fed meeting.

  • Retail sales rebound

    Retail sales rebounded in February after seeing their steepest decline in nearly a year during the month prior.

    Retail sales rose 0.6% in February from the previous month, according to Census Bureau data. Economists had expected a 0.8% increase in spending, according to Bloomberg data. January retail sales previously posted a surprise 1.1% decrease.

    February sales, excluding auto and gas, increased by 0.3%, in line with estimates.

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