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NEW YORK (AP) – Another hotter-than-expected update on inflation kept U.S. stocks in check Friday.
The S&P 500 fell 0.1% in early trading after hitting a new high the previous day. As of 9:37 a.m. ET, the Dow Jones Industrial Average was down 164 points, or 0.4%, while the Nasdaq Composite was almost unchanged.
Friday’s report is Inflation at the wholesale level It was the latest reminder that the fight against price gouging is far from over. Prices rose more in January than economists had expected, and the figure followed a similar report earlier in the week. US consumer cost of living It far exceeded my expectations.
Immediately after the report was released, U.S. Treasury yields soared in the bond market. The statistics left the door closed on hopes that the Federal Reserve could start cutting interest rates in March, as traders had initially expected. It also diminished expectations that the Fed could move to ease conditions on the economy and financial markets as early as May.
The yield on the 10-year U.S. Treasury rose to 4.31% from 4.24% late Thursday, nearing its highest level since November. Rising interest rates and yields make borrowing more expensive, tightening the brakes on the economy and lowering investment prices.
Still, the recalibrated bet on rate cuts has only moved Wall Street’s expectations closer to what the Fed has been outlining. Critics say traders were overreaching in their expectations of how quickly and by how much the Fed could cut interest rates in 2024. Expectations remain that the Fed’s next move will be to cut key interest rates to the highest level since 2001. , as said, it probably will.
In the meantime, the hope is that a strong economy will help businesses realize profit growth.
Applied Materials reported its latest quarterly profit was better than analysts expected, and the company jumped 9.6%. The company designs and manufactures systems used in the production of semiconductor chips, and is benefiting from the excitement of artificial intelligence technology.
Cryptocurrency company Coinbase Global reported earnings that far exceeded expectations, sending the stock soaring 16.5%. Rising cryptocurrency prices have increased the company’s trading revenue.
Among the biggest losers was Digital Realty, which fell 6.2%. Data center owners reported weaker than expected results.
In overseas stock markets, indexes rose in most regions of Europe and Asia.
In Japan, the Nikkei Stock Average in Tokyo rose 0.9%, approaching its all-time high set at the end of 1989. This was just before Japan’s “bubble” economy burst, with stock and real estate prices plummeting.
Japanese stocks are rising even though Japan’s economy has shrunk to the fourth largest in the world.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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