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US Benchmark Stock Indexes Mixed as Investors Assess March Producer Price Inflation
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US Benchmark Stock Indexes Mixed as Investors Assess March Producer Price Inflation
Apr 11, 2024 10:48 AM

01:25 PM EDT, 04/11/2024 (MT Newswires) -- US equity indexes and government bond yields traded mixed Thursday as investors weighed the wholesale producer price inflation data.

The S&P 500 rose 0.4% to 5,178.3, with the Nasdaq Composite up 0.9% to 16,316.2. The Dow Jones Industrial Average was down 0.2% to 38,394.8. Technology, consumer discretionary, and communication services rose intraday, while energy was the biggest decliner.

In economic news, producer prices in March logged the biggest annual increase since April 2023, the Bureau of Labor Statistics reported Thursday, a day after hotter-than-expected consumer inflation data largely wiped out pricing for a June interest rate cut by the Federal Reserve.

The US producer price index rose 2.1% year over year in March, accelerating from 1.6% in February. The estimate in a survey compiled by Bloomberg was 2.2%. Core PPI rose 2.4% from 2.1% and compared with the 2.3% Bloomberg-compiled consensus. The month-over-month PPI, at 0.2%, compared with 0.6% in February, while the corresponding data for core PPI was 0.2% versus 0.3%, respectively.

The Federal Open Market Committee will continue to monitor incoming data due to the uncertainty in the economic outlook, President of the Federal Reserve Bank of New York John Williams said Thursday. Williams said in prepared remarks that he expects inflation to continue to ease toward the 2% goal with "bumps along the way, as we've seen in some recent inflation readings."

On Wednesday, BLS data showed consumer inflation was hotter than predicted in March.

Markets widely expect the FOMC to keep its rates unchanged on May 1, according to the CME FedWatch Tool. The odds for a 25-basis-point cut in June were 20% on Thursday, up from 16% on Wednesday, but sharply down from 59% a week ago.

Minutes from the FOMC's March policy meeting showed Wednesday that risks to the inflation outlook were "tilted slightly to the upside" amid geopolitical tensions, even though most participants agreed rate cuts would likely be appropriate at some point this year. The highest probability for a rate cut in any month this year is 45%, in September, as per the FedWatch Tool.

The US 10-year yield was little changed at 4.56%. The two-year Treasury was down 1.2 basis points to 4.96%.

West Texas Intermediate crude oil fell 1% to $85.34 a barrel.

In company news, Globe Life ( GL ) shares sank 29% intraday, the worst performer on the S&P 500, after short-seller Fuzzy Panda Research alleged that company executives disregarded insurance fraud.

The second-worst performer on the index was CarMax ( KMX ) , with shares slumping 11% intraday after the used-car seller's fiscal Q4 results slid and the company pushed out a target for unit sales amid uncertainty regarding market recovery.

Gold rose 0.8% to $2,367.4 per ounce, and silver was up 0.3% to 28.14.

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