February 5, 2023

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The S&P 500 closed lower, posting six days of losses before the headline inflation report

The S&P 500 closed lower, posting six days of losses before the headline inflation report

The S&P 500 fell on Wednesday, posting its sixth straight daily loss and hitting its lowest closing level since November 2020 as investors looked forward to a key consumer report that will inform the pace of future Fed rate hikes.

The Dow Jones Industrial Average fell 28.34 points, or 0.10%, to close at 29,210.85. The S&P 500 lost 0.33%, falling to 3577.03. The Nasdaq Composite Index fell 0.09% to close at 10417.10.

Earlier today, stocks rose and bond yields fell afterwards Minutes from the Federal Reserve’s September meeting They were released this afternoon. The minutes showed that the central bank expects to continue raising interest rates and keeping them elevated until inflation shows signs of abating.

One comment in the minutes led to optimism that the Fed may slow or even roll back its tightening campaign if there is more turmoil in financial markets.

“Many participants noted that, particularly in the current highly uncertain global economic and financial environment, it will be important to calibrate the pace of further policy tightening with a view to mitigating the risks of significant negative impacts on the economic outlook,” the minutes stated. .

Stocks fell between gains and losses when Producer Price Index for September, a measure of the wholesale price of final demand, came in higher than expected. The reading rose 0.4% in September, more than the consensus estimate of a 0.2% increase, according to Dow Jones.

The Producer Price Index number is one measure of inflation that investors monitor along with the Federal Reserve. If inflation remains high, the central bank will likely continue its aggressive course of raising interest rates to bring it back under control. This means that prices will continue to rise and may remain high for longer than the markets expect, affecting stocks.

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Investors will get more important inflation data on Thursday. The Consumer Price Index It is a measure of price changes in the basket of consumer goods and public services.

said Mike Lowengart, Head of Model Portfolio Creation at Morgan Stanley Global Investments.

“There is no doubt that the Fed still has work cut out for them, and if tomorrow’s CPI reading is hot, don’t be surprised to see some investors grappling with how long it might take to manipulate inflation.”

Lea la cobertura del mercado de hoy en español aquí.