4:10pm: Fresh highs for Nasdaq, S&P 500
The Nasdaq and S&P 500 rounded out a strong February for equities by hitting new record highs at Thursday's closing bell.
The Nasdaq closed up 0.9% at 16,091 points while the S&P 500 was up 0.5% at 5,096 points. The Dow Jones finished 0.1% higher at 38,996 points.
12.26pm: Markets mixed as midday hits
The Dow Jones had retracted from its early gains come Thursday afternoon, as markets digested the news that inflation came in as expected at 2.4% in January.
Though the Dow Jones Industrial Average had shed 78 points to fall to 38,870, the Nasdaq Composite and S&P 500 remained in positive territory, up 50 and 4 points at 15,997 and 5,074 respectively.
According to analysts, the Federal Reserve's personal consumption expenditures (PCE) index reading of 2.4% for January, despite effectively confirming base rates would stay higher for longer, was reassuring given inflation was not worse-than-feared.
“It’s not so long ago that markets would have sold off heavily on news that US inflation was in line with forecasts,” IG analyst Chris Beauchamp commented.
“But, for the moment, any sign that inflation is holding steady is a welcome one.”
With a March base rate cut all but out the window, XTB analyst Kathleen Brooks noted hopes for a reduction in May now appeared to be on the rise again.
Coupled with news real incomes climbed in January, Brooks said “data released on Thursday suggest that fears about a slowdown in consumption could be overdone”.
“While jobless claimants rose last week on both an initial and continuing basis, this has failed to put much of a dent in sentiment,” she said.
Among equities, Hormel Foods Corp (NYSE:HRL) was among Thursday's big risers, with gains of over 13% after reporting better-than-hoped earnings and revenue for the fourth quarter.
Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) climbed over 6.7%, alongside peer Nvidia Inc by almost 2%, as smaller AI analytics company C3.ai comfortably beat earnings on Wednesday.
Tesla Inc (NASDAQ:TSLA, ETR:TL0) fell over 1% meanwhile, after a California judge ruled the electric vehicle firm must face a class action lawsuit involving thousands of black workers from its Fremont plant.
10.06am: Nasdaq leads gains as inflation comes in as expected
The Nasdaq led gains on Thursday morning as the markets opened in the green following the release of fresh inflation data for January.
Adding 145 points, the Nasdaq was up at 16,093 after Thursday’s opening bell.
The Dow Jones Industrial Average and S&P 500 each ticked up 22 points respectively in the meantime, to reach 38,971 and 5,091.
Gains came after a score of economic data was released early on, including from the Federal Reserve's personal consumption expenditures (PCE) index.
This showed prices rose by 2.4% in January compared to a year earlier and by 0.3% from December, which was in line with market expectations.
The core rate, which excludes food and energy prices, climbed by 0.4% month on month, marking the largest jump in a year.
Sentiment following figures was mixed though, according to XTB analyst Kathleen Brooks.
Markets had let out a “collective sigh of relief” that the data was not hotter than expected, she explained, but such gains masked “evidence that shows the disinflation trend is slowing down,” likely meaning base rates will remain higher for longer.
Also circulating was unemployment data, which showed jobless claims rose by 13,000 to 215,000 in the week to Feb 24.
Validus Risk Management’s Ryan Brandham noted the weaker-than-expected, but nonetheless strong, figures proved the US labour market’s continued "resilience".
These give “the Fed flexibility to take its time and assess if, and when, cuts are most appropriate,” he said.
Consumer spending data also revealed on Thursday that household outlays climbed by 0.2% in January, the smallest increase in three months, while incomes jumped by 1.0%.
8.26am: Stocks called lower at the open
US stocks are expected to extend their decline on Thursday, ahead of key inflation data later.
In futures trading, the Dow Jones is seen leading the decline, with a 0.28% fall, followed by the S&P 500 down 0.21% and Nasdaq losing 0.16%.
Yesterday, the Nasdaq was the main faller, dropping by 0.55%, with the S&P down 0.17% and Dow down less than 0.1%.
The important macroeconomic release that investors will be watching closely is the core PCE reading of US inflation, which is the Federal Reserve’s preferred measure of prices.
"A higher-than-anticipated reading could put the final nail in the coffin of the idea of a pivot to rate cuts before the summer," said analyst Russ Mould at AJ Bell.
The last update on the PCE deflator for the fourth quarter saw it revised higher from 2.0% to 2.1% and we’ll see January numbers today.
Economists at ING said their expectations are for a 0.4% core month-on-month increase, "which in our view will endorse the recent hawkish repricing of Fed rate expectations. At the moment the Fed Funds future curve prices in 80bp of easing."
This "should be enough to deter another round of Fed dovish repricing for a bit longer".
In corporate news, Meta Platforms Inc, the parent company of Facebook and Instagram, said it “strongly disputes” the allegations of privacy infringements filed by eight European Union consumer groups this Thursday.
Fast food chain The Wendy’s Company has hit back at speculation that it will begin raising prices at times of high demand, saying plans unveiled earlier this week were “misconstrued”.
Birkenstock stock could stumble after earnings slumped but the sandal maker beat revenue guidance for the fourth quarter.