© Reuters New York stock market situation: Dow closes 145.13 points lower, rising PPI dashes hopes that the Fed will cut interest rates.
InfoQuest – The New York Stock Exchange's Dow Jones closed lower on Friday (February 16), and the Nasdaq fell the most after a higher-than-expected Producer Price Index (PPI). This has dampened hopes that the Federal Reserve (US central bank) will cut interest rates soon.
The Dow Jones Industrial Average closed at 38,627.99 points, down 145.13 points, or -0.37%, the Standard & Poor's 500 index closed at 5,005.57 points, down 24.16 points, or -0.48%, and the Nasdaq index closed at 15,775.65 points, down 130.52 points, or -0.82%. %.
All three stock indexes fell this week. After five weeks of straight gains, the Dow lost 0.1%, the S&P lost 0.4%, and the Nasdaq fell 1.3%.
The market came under pressure after it was revealed that the producer price index rose more than expected in January. This has raised concerns about inflation once again. This will cause the Fed to delay its decision to cut interest rates.
The US Department of Labor released the Producer Price Index, which measures inflation in manufacturing spending. For January on Friday, the Headline PPI, which includes the food and energy categories, rose 0.9% in January year-on-year. Higher than analysts' expectations of 0.6% from 1.0% in December On a monthly basis, the overall Producer Price Index rose 0.3% in January, which was higher than analysts' expectations of 0.1% after falling by 0.1% in December.
The core producer price index, which excludes food and energy, rose 2.0% in January year-on-year. This was higher than analysts' expectations of 1.6% from 1.7% in December. On a monthly basis, the core Producer Price Index rose 0.5% in January, which was higher than analysts' expectations of 0.1% after falling 0.1% in January. December.
Such information could prompt the Fed to delay its decision on lowering interest rates. After earlier this week the higher than expected Consumer Price Index (CPI) report also sparked selling pressure in the stock market. Despite the revelation that retail sales declined in January on Thursday. It raised hopes for lowering interest rates.
Bond yields rose on Friday after producer price index data led traders to expect the Federal Reserve may delay interest rate cuts until after June.
Two Fed officials express caution about interest rate cuts By Atlanta Fed President Raphael Bostic He wants more evidence that inflationary pressures are decreasing, he said. But it is open to further interest rate cuts in the coming months.
There is still work to do to ensure price stability, said Mary Daly, President of the Federal Reserve Bank of San Francisco. Although there has been significant progress
Most large-cap stocks fell, with Meta Platforms down 2.2%, and the S&P 500 Communications Services Index down 1.56%.
Shares of Applied Materials, a semiconductor equipment supplier, rose 6.4% against the market, after the company forecast higher-than-expected revenues in the second quarter of 2024 due to strong demand for its chips used in artificial intelligence technology.
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