- SUMMARY
On Thursday, the US stock market experienced a decline as higher producer prices raised concerns about the Federal Reserve’s potential decision to postpone interest rate cuts.
Producer prices, which measure the cost of goods and services used by businesses, increased unexpectedly in February, driven by higher gasoline and food prices.
This has prompted investors to lower their expectations of a rate cut in June, with the odds now estimated at around 63%, down from over 80% just a week ago.
Experts believe that the Fed is unlikely to cut rates until inflation, currently well above their target of 2%, is significantly reduced.
The latest data suggests that inflation is actually moving in the opposite direction.
While retail sales rebounded in February, they fell short of economists’ expectations.
Meanwhile, shares of Nvidia, a leading semiconductor company, dropped over 3% due to profit-taking after recent gains.
Robinhood Markets, the popular trading app company, saw its shares rise more than 5% as it reported a 16% increase in assets under custody in February.
- Key Takeaways
Producer prices and interest rates.
Unexpectedly higher producer prices in February raised concerns about the Federal Reserve’s decision to postpone interest rate cuts.
Inflation and Federal Reserve.
Experts believe that the Fed is unlikely to cut rates until inflation is significantly reduced, and the latest data suggests that inflation is moving in the opposite direction.
Stock market performance.
Nvidia shares dropped over 3% due to profit-taking, while Robinhood Markets’ shares rose more than 5% due to a 16% increase in assets under custody.