Stocks slide after hot inflation print

US stock markets fell on Thursday following the release of a higher-than-expected headline inflation print. The reading served as one of the last pieces of data that could sway the Federal Reserve at its policy meeting next week.

The S&P 500 (^GSPC) fell 0.4%, while the Dow Jones Industrial Average (^DJI) fell 0.4%. The tech-heavy Nasdaq Composite ( ^IXIC ) fell 0.5%. Shares of both Nvidia ( NVDA ) and Tesla ( DSLA ) fell more than 4%, continuing declines from the previous session.

February's producer price index rose 0.6% from last month, beating expectations for a 0.3% increase. Investors were watching for inflation to cool fast enough to appease central bank policymakers and announce interest rate cuts.

That calculus could change, though, as markets downplay signs of sticky inflation in Tuesday's CPI report and cling to their belief that policy will remain central through the summer. As stated therein CME Group's FedWatch tool40% of traders now expect the central bank to keep interest rates on hold until June, up from 25% a week ago.

Meanwhile, retail sales rose 0.6%, missing estimates for a 0.8% rise, but indicating a rebound from a decline in January.

In commodities, oil's revived rally continued to build after the IEA warned that supply would lag this year and US inventories would shrink. WTI crude futures (CL=F) traded above $81 a barrel, touching their highest level since November, while Brent crude futures (BZ=F) climbed above $85.

On the corporate front, shares of Fisker ( FSR ) fell more than 40% after the Wall Street Journal reported that the EV maker was considering a bankruptcy filing.

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  • Trending Tickers Thursday

    Microsoft (MSFT)

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    Year to date, shares are up about 15%.

    Robin Hood (HOOD)

    Shares of Robinhood Markets rose more than 7% on Thursday after the brokerage posted strong growth in assets under custody for the month of February, signaling momentum in stock and crypto trading.

    Assets under custody (AUC) rose 16% to $118.7 billion in February from the previous month.

    Bisker (FSR)

    Fisker stock fell more than 50% on Thursday after The Wall Street Journal reported that the EV startup was looking into possible bankruptcy. The report comes two weeks after the company warned its ability to “continue to be a concern” and announced a 15% workforce cut.

  • The Fed's cautious approach to cutting rates bolstered by the new inflation reading

    Fresh evidence of sticky inflation released Thursday will reinforce the Federal Reserve's cautious approach to rate cuts and could add to questions about whether interest rates will be raised longer than expected in 2024.

    Jen Jennifer Schoenberger of Yahoo Finance reports:

    “Given the stickier-than-expected nature of inflation, it will be very difficult for the Fed to justify a near-term rate cut,” Stifel's Lindsey Piegza told Yahoo Finance Live on Thursday. “Our base case is that the Fed has put the second half of the year on hold before initiating a change in policy.”

    Thursday's new inflation measure came from the Labor Department's Producer Price Index, which tracks the prices businesses pay to produce goods and services.

    The index rose 0.6% from January to February, up from 0.3% in the previous month. “Core” producer prices, excluding volatile food and energy costs, rose 0.3% month-on-month. The central bank keeps a close eye on key prices.

  • Oil gains on falling stocks, drone strikes on Russian refineries

    Oil rose more than 1% on Thursday, adding to the previous session's gains amid falling inventories and continued drone strikes on Russian refineries.

    On Tuesday, West Texas Intermediate (CL=F) traded above the $81 per barrel level, while international benchmark Brent (BZ=F) traded above $85 per barrel.

    Data from the Energy Information Administration showed a drop in U.S. crude inventories last week.

    A surge in drone attacks on Russian refineries stemming from the Ukraine-Russia war over the past few days has also weighed on oil markets.

  • Stocks roll in hotter than expected inflation

    Shares opened higher in early trade, but quickly turned negative.

    The S&P 500 (^GSPC) fell 0.3%, while the Dow Jones Industrial Average (^DJI) shed 0.4%, or about 100 points. The Nasdaq Composite (^IXIC) also slipped below the flatline.

    Nvidia ( NVDA ) opened lower for the second day in a row. Shares of the chipmaker, along with Tesla ( TSLA ), dragged shares lower on Wednesday.

    February's producer price index rose 0.6%, beating expectations for a 0.3% rise. Investors were eyeing the print as the last key data point ahead of a key Federal Reserve policy meeting next week.

  • Stocks edged higher despite warmer than expected inflation fears

    On Thursday, stocks rose even as wholesale inflation came in higher than expected.

    The S&P 500 (^GSPC) rose 0.1%, while the Dow Jones Industrial Average (^DJI) rose 0.3%, or more than 100 points. The Nasdaq Composite (^IXIC) recovered 0.2% from yesterday's losses.

    Nvidia ( NVDA ) opened lower for the second day in a row. Shares of the chipmaker, along with Tesla ( TSLA ), dragged shares lower on Wednesday.

    February's producer price index rose 0.6%, beating expectations for a 0.3% increase. Investors were watching the print amid expectations that Fed policymakers will reiterate their desire to cut rates sometime this year after next week's meeting.

  • Retail is making a comeback

    Retail sales rebounded in February after the previous month saw the steepest decline in nearly a year.

    Retail sales rose 0.6% in February from the previous month Census Bureau data. Economists were expecting a 0.8% increase in spending, according to Bloomberg data. January retail sales previously posted a surprising 1.1% decline.

    February sales, excluding autos and gas, rose 0.3%, according to estimates.

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