4:05pm: Seeing red at the close
Another hot inflation report saw the three major US stock indexes finish lower on Friday.
The Nasdaq led the losses, down 0.8% at 15,777 points. The S&P 500 lost 0.5% at 5,005 points and the Dow Jones was down 0.4% at 38,628 points.
12:10pm: Stocks stall after hot inflation report
US equities experienced a modest decline on Friday following another inflation report exceeding expectations, reducing the likelihood of interest rate cuts.
The S&P 500 index remained largely unchanged after reaching another record closing high, sitting at 5,030 points at noon. Elsewhere, the Dow Jones edged down by 0.2% at 38,762 and the Nasdaq also retreated by 0.2% to 15,872.
The past weeks have been marked by turbulence and ambiguity, analysts at Bank of America wrote earlier on Friday. Strong showings in GDP, job figures, and CPI inflation initially raised concerns of potential economic overheating, prompting market reactions that signaled a departure from expectations of Federal Reserve cuts. However, subsequent releases revealing notably weak retail sales and industrial production data have introduced uncertainty into the narrative.
Assessing the overall picture, analysts suggest that these swings in data represent a mix of both meaningful signals and inherent noise. Despite this volatility, there's a slight inclination towards revising growth forecasts upward. However, the prospect of stickier inflation could potentially delay anticipated Fed cuts.
10:12am: Markets open lower on worse-than-feared producer price rises
The Nasdaq led US markets lower in early trading on Friday, after January’s producer price index data came in higher than expected.
Producer prices rose by 0.9% over the year to January, above market expectations for a 0.6% jump.
This follows hotter-than-expected consumer price index data earlier in the week, with the worse-than-feared figures dampening hopes that the Federal Reserve could cut base interest anytime soon.
The Nasdaq Composite slipped 0.6% to 15,817 on the news, with the S&P 500 and Dow Jones each falling by around 0.3% to 5,013 and 38,647 respectively.
City Index analysts had said prior to the producer price data being released that “an unexpected increase [would] likely strengthen the argument for the Fed to delay rate cuts, potentially leading to higher yields and a stronger dollar”.
7.14am: Dow Jones called lower, S&P 500 and Nasdaq seen up
The Dow Jones is expected to slip on Friday’s opening bell, while the Nasdaq and S&P 500 look to be readying for bright starts, as the markets await producer prices data.
Scope Markets analysts noted that there was “potential for further dollar strength should producer prices start to pick up once again” with the data due later on Friday morning.
“Much like wages, producer prices provide a key gauge of underlying inflation pressures being felt by US businesses, with traders looking out for any signs of increased costs as Red Sea disruptions impact the cost of shipping globally,” Scope added.
“Any additional signs of resurgent inflation pressures could lead to a renewed push higher for the US dollar.”
Futures trading had the Dow Jones down 0.1% at 38,820, with the S&P 500 and Nasdaq being called 0.2% and 0.6% higher at 5,056 and 18,016 respectively.
Consensus is for the producer price index to come in 0.6% higher year on year, with housing starts and building permits data is also due, alongside speeches from the Federal Reserve’s Mary C. Daly and Michael S. Barr.