US stocks rolled over on Thursday morning following the release of a hotter-than-expected wholesale inflation print, adding to concerns about the Federal Reserve’s upcoming policy meeting. The S&P 500 fell 0.2%, the Dow Jones Industrial Average declined 0.2%, and the Nasdaq Composite wavered around the flatline. Shares of Nvidia and Tesla also declined following a slide in the prior session.
The Producer Price Index for February rose 0.6%, higher than the expected increase of 0.3%. This data has investors watching closely to see if inflation is cooling fast enough to satisfy Fed policymakers and potentially lead to interest rate cuts. Despite signs of sticky inflation in Tuesday’s CPI report, the market is still hopeful for a policy pivot come summer.
Retail sales also came in slightly below estimates, increasing by 0.6% in February compared to an expected rise of 0.8%. This data release was closely watched for clues on the health of the US economy ahead of the central bank’s meeting next week.
In commodities, oil prices continued to rally after the IEA warned of supply shortages and US stockpiles shrank. WTI crude futures traded just above $81 per barrel, while Brent crude futures pushed above $85.
On the corporate front, Fisker’s shares plunged more than 40% after reports that the EV maker is exploring a bankruptcy filing.
Overall, the new inflation reading is likely to reinforce the Fed’s cautious approach to rate cuts, with some analysts predicting a delay in any policy changes until the second half of the year. Oil prices are also on the rise due to falling inventories and ongoing drone attacks on Russian refineries. Stocks initially opened higher but turned negative in early trading, with investors keeping a close eye on the upcoming Fed meeting.
