Friday’s decline in Wall Street’s main indexes was caused by concerns that the Federal Reserve might maintain its aggressive interest rate hikes for a longer period of time after producer prices rose more than anticipated.
According to the Labor Department’s report, producer prices increased by 7.4% last month, compared to economists’ expectations of 7.2%. However, the increase was less than the 8% in October.
Core producer prices, which do not include volatile components like food and energy, increased by 6.2% in comparison to estimates of a 5.9% increase.
Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, stated, “It is disappointing and it shows that we are stuck on the treadmill of inflation.” He added, “I’m not surprised to see the market sell-off like it is right now.”
given that the report also demonstrated that the underlying trend in inflation had moderated, bets that the Fed will raise its policy rate by 50 basis points to 4.25 percent-4.50% next week remained largely unchanged. FEDWATCH
Buyer costs information for November, due Tuesday, will give new insights on the national bank’s financial fixing plans.
The preliminary reading on consumer sentiment from the University of Michigan improved to 59.1 in December from 56.8 in November, supporting the indexes’ recovery from their lows.
Fears of a possible recession next year as a result of prolonged U.S. rate hikes have pushed Wall Street’s main indexes lower in December after two months of gains.
After data showed that initial jobless claims slightly increased last week, suggesting the labor market was deteriorating, U.S. stocks had snapped a recent losing streak on Thursday.
The Dow Jones Industrial Average was down 86.15 points, or 0.26 percent, at 33,695.33, the S&P 500 was down 5.98 points, or 0.05 percent, at 3,957.53, and the Nasdaq Composite was down 16.35 points, or 0.05 percent, at 11,065.66 at 10:12 a.m. ET.
Alphabet Inc. GOOGL.O, Nvidia Corp. NVDA.O, Tesla Inc. TSLA.O, and Amazon.com AMZN.O
were mixed among the majority of mega-cap technology and growth stocks.
Carvana Co CVNA.N dropped 8% after Jefferies halved the price target for the used-car retailer’s stock, while Netflix Inc. NFLX.O gained 4.5 percent after Wells Fargo upgraded the streaming giant’s stock to “overweight” from “equal weight.”
Following the chipmaker’s forecast of higher-than-expected revenue for the current quarter, Broadcom Inc. AVGO.O saw a modest increase of 3.6%.
Lululemon Athletica Inc LULU.O tumbled 12.2% after the athletic clothing producer conjecture lower-than-anticipated occasion quarter income and benefit.
According to a report, Boeing Co. BA.N plans to announce a deal with United Airlines UAL.O for 787 Dreamliner orders next week.
The ratio of declining issues to advancers was 1.13 to 1 on the NYSE and 1.18 to 1 on the Nasdaq.
There were five new 52-week highs and one new low for the S&P index, while there were 24 new highs and 96 new lows for the Nasdaq.