US stocks traded relatively flat on Wednesday as traders eagerly awaited the release of fresh inflation data. The producer price index, a key measure of wholesale inflation, is set to be unveiled on Thursday, with many investors looking to this data point to help determine the pace of interest rate cuts later in 2024.
Despite signs of a strong economy, some investors are bracing for aggressive rate cuts from the Federal Reserve in the coming months. Market expectations suggest a 43% chance that central bankers could slash rates by 100 basis points or more by December, according to the CME FedWatch tool.
In addition to the producer price index, traders are also keeping a close eye on initial jobless claims and February retail sales data, which are expected to provide further insight into the state of the economy and consumer spending habits.
February’s consumer inflation data came in slightly higher than anticipated, with consumer prices rising 3.1% last month, according to the Bureau of Labor Statistics. This uptick in inflation has led some analysts to suggest that disinflation may still have further to go in the coming months.
Overall, US stocks ended the day mixed, with major benchmark indexes mostly flat. Despite the uncertainty surrounding future interest rate cuts, investors remain cautiously optimistic about the economic outlook.
In commodities, bonds, and crypto markets, West Texas Intermediate crude rose 2.8% to $79.87 a barrel, while Brent crude, the international benchmark, increased by 2.6% to trade at $84.18 a barrel. Gold prices ticked higher by 0.2% to $2,163.40 per ounce, and the 10-year Treasury yield rose three basis points to 4.19%. Bitcoin also saw a 2.3% jump, reaching $73,220.
As traders continue to monitor economic data and market trends, the coming days are likely to bring further volatility and uncertainty to US stock markets.
