Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., March 13, 2024.
Brendan McDermid | Reuters
The S&P 500 slipped Thursday after the release of hotter-than-expected U.S. inflation data sent Treasury yields higher, while Nvidia shares were under pressure.
The broad market index slipped 0.4%. The Dow Jones Industrial Average pulled back 176 points, or 0.4%. The Nasdaq Composite fell 0.4%.
February’s producer price index, a measure of wholesale inflation, advanced 0.6% last month. Excluding food and energy prices, core PPI climbed 0.3% in February. Economists polled by Dow Jones expected a 0.3% gain for headline PPI and a 0.2% increase for the core reading. Stocks were initially resilient following the report, but lost steam shortly after the open.
“The questions now are, will traders rethink how soon the Fed will cuts rates, and will that slow down the stock market rally in any meaningful way?” said Chris Larkin, managing director of trading and investing at E-Trade from Morgan Stanley.
The hot inflation report sent bond yields higher, with the benchmark 10-year Treasury adding 10 basis points. Shares of Nvidia were lower for the fourth session in five, pulling back nearly 4%.
“I think one question is, are yields going to go higher still, and if they do do we have more downside in the market? I think the answer is yes to both,” said Thierry Wizman, global FX and rates strategist at Macquarie.
The PPI report is the last major piece of economic data to be released prior to the Federal Reserve’s upcoming policy meeting, set for March 19-20.
Investors were buying major technology shares like Apple and Microsoft Thursday. Trading platform Robinhood popped 7% after the company reported a 16% increase in assets under custody in February from the prior month. Troubled electric vehicle startup Fisker tumbled 48% after The Wall Street Journal reported that the company has hired restructuring advisors to prepare for a potential bankruptcy filing.
