Nasdaq 100, Dow Jones, S&P 500 News: Wall Street Dips as Rate Cut Expectations Cool

Wall Street Indexes Slip on Inflation Data

Wall Street’s primary indexes declined on Thursday following the release of unexpectedly high producer prices data. The Producer Price Index (PPI) for February rose 0.6% month-on-month, exceeding the forecasted 0.3%. This annual increase stood at 1.6%, higher than the predicted 1.1%.

At 15:08 GMT, the Dow Jones is trading 38977.98, down 65.34 or -0.17%. The S&P 500 Index is at 5153.07, down 12.24 or -0.24% and the Nasdaq-100 Index is trading 16174.82, down 2.94 or -0.02%.

Retail Sales and Unemployment Claims

Despite a slump in Wall Street, U.S. retail sales showed resilience, recording a 0.6% increase in February, although slightly below the anticipated 0.8%. Concurrently, unemployment claims dropped to 209,000, falling short of the expected 218,000, signaling strength in the employment sector.

Rate Cut Expectations and Federal Reserve’s Upcoming Meeting

The likelihood of the Federal Reserve initiating a rate cut in June has decreased to 63.5%, as gauged by the CME FedWatch tool. This dip from a previous 67% expectation reflects the market’s response to recent economic data. The Federal Reserve’s policy meeting next week is highly anticipated, with potential cues on the onset of rate easing.

Sector Movements and Key Stock Performance

Real estate led the losses among the S&P 500 sectors, dropping 1.6%. Notably, technology and megacap growth stocks showed slight gains. However, chipmakers, including Nvidia, Intel, and Advanced Micro Devices, faced declines. Robinhood’s shares surged 6% after reporting a 16% increase in assets under custody, while aerospace firm RTX gained 1.9% following an upgrade by Wells Fargo.

Market Outlook

The market faces a bearish short-term outlook, influenced by the higher-than-expected inflation data and the uncertain timing of the Federal Reserve’s rate cuts. The impact of these factors on the bond yields and stock market dynamics, especially in technology and chip sectors, will be crucial in the coming weeks. The Federal Reserve’s meeting and its subsequent decisions will be pivotal in shaping the market trend.

Technical Analysis

E-mini Nasdaq-100 Index futures are edging lower after giving back early gains. Sentiment is starting to lean to the downside with the market now trading lower for March after hitting a record high on March 8.

A trade through 18691.25 will signal a resumption of the downtrend.

On the downside, trades through three minor bottoms at 18138.00, 18082.75 and 18076.25 will shift momentum to the downside with the next target the 50-day moving average at 17629.95.