Dow closes 137.66 points lower, inflation concerns encourage Fed to keep dollar higher longer than expected – Hua Seng Heng Hua Seng Heng

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The New York Stock Exchange's Dow Jones closed lower on Thursday (March 14) as investors worried that a higher-than-expected US Producer Price Index (PPI) could prompt the Federal Reserve to keep interest rates high for an extended period. . Longer than expected

The Dow Jones Industrial Average closed at 38,905.66 points, down 137.66 points, or -0.35%, the S&P 500 index closed at 5,150.48 points, down 14.83 points, or -0.29%, and the Nasdaq index closed at 16,128.53 points, down 49.24 points, or -0.30%. %.

The US Department of Labor revealed that the Producer Price Index (PPI), which measures inflation in producer spending, rose 1.6% year-on-year in February. This was higher than analysts' expectations of 1.1% after rising 1.0% in January.

The core producer price index, which excludes food and energy, rose 2.0% in February year-on-year. This was higher than analysts' expectations of 1.9% after rising 2.0% in January.

A higher-than-expected producer price index has investors concerned that the Federal Reserve may keep interest rates high for longer than expected. This also sent the 10-year US government bond yield above 4.2%, which also put pressure on the stock market.

The latest FedWatch tool from CME Group indicates that investors give a 62.9% weight to the Federal Reserve cutting interest rates by 0.25% at its June meeting. This is down from 81.7% last week. As for the meeting on March 19 and 20, investors expect the Fed to maintain interest rates at 5.25-5.50%.

Public utilities and real estate stocks are interest rate sensitive stocks. It fell further, and the real estate stock index fell by 1.6%, and the utility stock index fell by 0.8%.

Indian stocks fell by 3.2%, while the semiconductor index fell by 1.8%, and the index lost 3.5% this week as investors took profits after stock prices rose in the United States.

Concerns about a higher-than-expected producer price index also weighed on stocks in the Russell 2000, a group of lower-capitalization stocks, and the Russell 2000 fell 2%, said Michael James, an analyst at Wedbush Securities.

As for the other economic data that was revealed last night. The Labor Department said initial claims for unemployment benefits fell by 1,000 to 209,000 last week. And lower than analysts' estimates of 218,000.

The US Department of Commerce revealed that retail sales rose 0.6% month-on-month in February. But it was lower than analysts' expectations of 0.8% after falling 1.1% in January and on an annual basis. Retail sales rose 1.5% in February.

Source: InfoQuest News Agency