3/15/2024

February PPI reduced investor optimism

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ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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Key points:

  • Shares of chip makers fell for the second day in a row.
  • The February producer price index in the US is higher than expected.
  • The likelihood of a rate cut in June has decreased; the Fed’s policy may be less lenient than expected.

On March 14, the American stock market closed trading in the red. For the second session in a row, shares of chip manufacturers have fallen. At the same time, the producer price index showed an unexpected jump, causing investors to question the timing of the Federal Reserve’s interest rate cuts.

The Dow Jones Industrial Average lost 137.66 points (0.35%) to close at 38,905.66. The S&P 500 index fell 14.83 points (0.29%) to 5,150.48. The Nasdaq Composite fell 49.24 points (0.3%) to 16,128.53.

US inflation was higher than expected in February

The February indicators of the US producer price index exceeded analysts’ forecasts. The growth was primarily due to higher prices for gasoline and food products.

The Fed is not expected to change its current interest rate at its policy meeting next week. According to the FedWatch Tool CME, the likelihood of a 25 basis point rate cut at the Fed’s June meeting dropped to 62.9%, down from 81.7% the week before.

Thus, the Fed’s policy this year may turn out to be less accommodative than the market expected, but the prospect of further tightening remains unlikely.

Utilities and real estate sectors are among the outsiders

Sectors sensitive to macroeconomic data showed the largest decline, including real estate – by 1.6%, utilities – by 0.8%.

Nvidia shares fell 3.2%, while the semiconductor index fell 1.8%. Overall, the semiconductor index lost 3.5% for the week, as investors took profits after the recent sharp rise.

Year to date, the S&P 500 is up 8%. Russell 2000 small-cap stocks fell 2% on the day.

Trading volume on US exchanges amounted to 13.1 billion shares, which is higher than the average for the last 20 trading days (12.1 billion).

The S&P 500 hit 39 new 52-week highs and no new lows. The Nasdaq Composite recorded 57 new highs and 186 new lows.

ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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