US Stocks Fall on Higher-than-Expected Inflation
US stocks fell on Friday after the July Producer Price Index (PPI) showed higher inflation than expected. The PPI data revealed that wholesale inflation increased by 0.3% in July, surpassing estimates for a 0.2% rise. The rise in inflation was driven by services, with prices rising by 0.3% compared to the estimated 0.2%. This report follows the release of the July Consumer Price Index (CPI) report, which revealed lower-than-expected consumer inflation.
The conflicting data regarding inflation has led investors to anticipate that the Federal Reserve will pause their interest rate hikes during the September FOMC meeting, according to the CME FedWatch Tool. However, it is important to note that the Fed is still awaiting the release of the August CPI and jobs report, which will further inform their decision.
Treasury yields experienced a slight increase following the data, indicating the market’s response to the higher-than-expected inflation. LPL’s chief global strategist, Quincy Krosby, emphasized that today’s report provides ammunition for the hawkish wing of the Fed to advocate for another rate hike before reaching the terminal rate.
US Market Indexes
At the opening bell on Friday, the US market indexes stood as follows:
- Dow Jones Industrial Average: 35,139.14, down 0.11% (-37 points)
- Nasdaq Composite: 13,662.08, down 0.54%
It is important to monitor market developments closely, as they are susceptible to changes based on various economic factors, including inflation.
Commodities, Bonds, and Crypto
Alongside the stock market, it is also crucial to pay attention to developments in commodities, bonds, and the cryptocurrency market. These areas are interconnected and can influence broader market trends. Stay informed about any significant movements in these sectors to make well-informed investment decisions.
Analyst comment
Negative news. Higher-than-expected inflation has caused US stocks to fall. Investors anticipate the Federal Reserve will pause interest rate hikes. Treasury yields have increased. The market may experience volatility as it awaits the release of the August CPI and jobs report.
