US stocks trade mixed as fresh inflation data comes in hotter than expected

• US stocks traded mixed after fresh inflation data came in hotter than expected.
• PPI data showed a 0.3% increase from December and the year-over-year change increase of 0.9%.
• “If we see continued strength in the inflation data, it’s possible that the Fed could push its rate cuts into 2025.”

US stocks struggled for direction after Friday’s inflation report came in higher than expected..

The Producer Price Index (PPI) notched a 0.3% increase since December, above expectations of 0.1%, while it rose 0.9% year-over-year. Those figures roll in after the Consumer Price Index also came in hotter than expected, taking markets by surprise

“Friday’s stronger-than-expected Producer Price Index suggests that inflation is stickier than many investors expected and this data, in addition to Tuesday’s strong Consumer Price Index, suggests that the Federal Reserve has very little reason to cut interest rates anytime soon,” Clark Bellin, strategist from Bellwether Wealth, said.

Federal Reserve chair Jerome Powell has indicated that a March rate cut is likely off the table. And as more and more key data like PPI, CPI, jobs, and retail sales indicate a resilient economy, the outlook on the first cut keeps getting pushed farther out. The CME FedWatch tool shows traders now believe there is a 69% chance that rates will be held where they are at the Fed’s May meeting, up from 61% on Thursday and 39% a week ago.

“If we see continued strength in the inflation data, it’s possible that the Fed could push its rate cuts into 2025,” Bellin said.

Here’s where US indexes stood at the opening bell at 9:30 a.m. on Friday: 

• S&P 500: 5,024.76, down 0.10%
• Dow Jones Industrial Average: 38,682.88, down 0.23% (-90.24 points)
• Nasdaq Composite: 15,896.92, down 0.06%

Here’s what else is going on:

• The US economy is going to fall into recession in the middle of 2024, Citi’s chief economist says.
• New filings show Elon Musk’s Tesla ownership has soared to 20.5% and is now worth more than $120 billion.
• Emotion, not fundamentals, is driving stock gains, and a recession could send stocks down more than 30%, a market vet says.
• Investors bought a record 26% of the affordable houses in the US last quarter.

In commodities, bonds, and crypto: 

• Oil prices rose, with West Texas Intermediate up 0.40% to $78.34 a barrel. Brent crude, the international benchmark, dipped 0.29% to $82.62 a barrel.
• Gold slipped 0.02% to $2,014.40 per ounce.
• The 10-year Treasury yield edged up 7.3 basis points to 4.313%.
• Bitcoin went up 1.12% to $52,288.14.