- US stocks declined on Thursday after a slate of fresh economic data.
- PPI in February climbed 0.6%, more than the 0.3% Dow Jones forecast.
- Retail sales meanwhile came in softer-than-expected.
US stocks declined on Thursday as investors took in a hot inflation reading and the latest retail sales data for February.
Stocks dropped as Treasury yields edged higher. The 10-year government bond yield jumped 10 basis points to 4.296%.
The producer price index in February accelerated 0.6%, more than the 0.3% gain expected by Dow Jones economists. Much of the surge can be attributed to a spike in energy prices, which tend to be more volatile and which Federal Reserve officials look at less than other goods and services inflation.
Earlier in the week, the February CPI report also came in hotter-than-expected with a 3.2% increase compared to the same time last year.
Together the data adds a wrinkle in the immaculate disinflation narrative and complicates the outlook for the Fed's rate cut timing.
Futures markets aren't expecting any change to the benchmark rate at this month's Fed meeting, but they see about 60% odds the central bank cuts by 25 basis points in June, per CME's FedWatch Tool.
"For the data-dependent Fed, this report isn't helpful for a market that demands a 2024 rate cut," said Quincy Krosby, chief global strategist for LPL Financial.
Meanwhile, retail sales in February increased by 0.6% on a seasonally adjusted basis. That's below Dow Jones' forecast for a 0.8% jump but marks a rebound from January when sales fell 0.8%.
The release showed motor vehicle sales rebounded 1.6% in February compared to January, in addition to small upticks in restaurant spending.
"The consumer has a bit more capacity to spend but the consistent downward revisions should tell us the economy is slowing," Jeffrey Roach, chief economist for LPL Financial, wrote in a note. "A helpful indicator to watch in the coming months is auto sales. If the economy is truly slowing, expect to see vehicle inventories swell and dealers offer more incentives."
Here's where US indexes stood as the market closed at 4:00 p.m. on Thursday:
- S&P 500: 5,150.48, down 0.29%
- Dow Jones Industrial Average: 38,905.66, down 0.35% (-137.66 points)
- Nasdaq Composite: 16,128.53, down 0.3%
Here's what else is going on:
- MicroStrategy's massive debt-fueled bitcoin purchases could make a future downturn worse, according to JPMorgan.
- Dogecoin rallied after Elon Musk said the token could someday pay for Teslas.
- India imported 420,000 fewer barrels of Russian oil per day in February.
- Wells Fargo said Tesla stock could drop 23% in a new downgrade.
- One market veteran said stocks could gain another 26% through 2026.
- We now know who Satoshi Nakamoto is not.
- A huge wave of housing inventory hit the market in February.
In commodities, bonds, and crypto:
- Oil prices climbed, with West Texas Intermediate up 1.72% to $81.09 a barrel. Brent crude, the international benchmark, moved higher 1.40% to $85.19 a barrel.
- Gold edged lower 0.66% to $2,166.50 per ounce.
- The 10-year Treasury yield climbed 10 basis point to 4.296%.
- Bitcoin dipped 6.03% to $68,710.