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Stock Market News: Nasdaq Hits Record After PPI Inflation Data
The S&P 500 closed higher. The Dow was flat.
Last Updated:
April 11, 2024 at 7:49 PM EDT
What to Watch Today
Stocks gained on Thursday after wholesale prices were lower than expected.
Producer prices rose by 0.2% in March from February, versus economists’ average estimate of a 0.3% increase and February’s 0.6% growth. The PPI was 2.1% higher than a year earlier.
The data follow a hotter-than-expected reading on consumer prices on Wednesday. This could affect the Fed's thinking on interest rates—the odds of a June cut have dropped to below 20% from 60% last week, according to the CME FedWatch tool.
The European Central Bank kept interest rates on hold today but a June cut is seen as more likely than for its U.S. counterpart.
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The Nasdaq Composite surged to a record close on Thursday, with Big Tech leading a broader market rally after the latest inflation update came in cooler than expected.
The Dow Jones Industrial Average was flat. The S&P 500 was up 0.8%. The Nasdaq Composite was up 1.7%, its highest close on record.
The 2-year Treasury yield dipped to 4.959% at 3 p.m. The 10-year yield was up to 4.575%.
The producer price index rose 0.2% in March from February, which was lower than the 0.3% price growth economists had expected. Stocks had fallen on Wednesday when the consumer price index showed inflation is proving stickier than the Federal Reserve had hoped.
“The inflation data are noisy, and the market reflects that reality,” writes Jamie Cox, managing partner at Harris Financial Group. “There are clear signs of disinflation in lots of places, but the last mile of the inflation fight is going to be the most difficult. The Fed will cut into the noise, but not until after June.”
Odds of at least one rate cut by the July meeting ticked up to 48.2% from 42.4% on Wednesday, according to the CME FedWatch Tool. That’s still down from 80.7% odds a week ago, prior to the hot CPI report.
Traders will now turn their attention to the start of earnings season, which begins with banks on Friday.
The run for tech stocks after Wednesday’s pullback may show some optimism heading into the sector’s own reports in the weeks ahead.
Crude futures return gains from yesterday's spike on geopolitical risk perception as the market considers the impact of a stronger dollar and this week's big U.S. crude stock build.
Weather damage at Motiva's refinery at Port Arthur, Texas that shut down several pieces of equipment yesterday was among market concerns, Mizuho's Robert Yawger says in a note.
"Today, there seems to have been a pivot away from geopolitics and towards miserable fundamentals, with inflationary demand destruction also in the mix, and some nervousness around the largest refinery in the U.S.," he says.
OPEC left its demand growth forecasts unchanged for this year and next but lowered its non-OPEC supply growth estimate by 100,000 barrels a day.
WTI for May delivery settles down 1.4% at $85.02 a barrel, and June Brent falls 0.8% to $89.74.
U.S. natural gas futures snap a four-session winning streak on a bigger-than-expected injection into storage that left inventories 633 billion cubic feet or 38% above the 5-year average for the week.
The EIA said natural gas in underground storage rose by 24 Bcf to 2,283 Bcf in the week ended April 5, which matched the 5-year average build. Analysts surveyed by The Wall Street Journal had expected an 11 Bcf injection.
Natural gas for May delivery settles down 6.4% at $1.767/mmBtu, a 2-week low.