Benzinga - by Piero Cingari, Benzinga Staff Writer.
The S&P 500 and Nasdaq 100 both halted their five-week winning streak on Friday, prompted by two inflation reports that were hotter than expected, giving fuel to concerns the Federal Reserve might delay interest rate cuts.
Earlier in the week, the Consumer Price Index report revealed an annual inflation rate of 3.1%, surpassing the anticipated 2.9%. Additionally, core inflation, excluding energy and food items, came in higher than predicted at 3.9% instead of the expected 3.7%.
Worries about a challenging path ahead to reach the Fed’s 2% target intensified Friday as the Bureau of Labor Statistics reported a 0.3% monthly surge in the Producer Price Index. This marked a rebound from December’s 0.1% contraction, exceeding the anticipated 0.1% increase.
Traders adjusted their expectations on Fed policy, reducing speculation of cumulative rate cuts for 2024 from 120 to 95 basis points, effectively removing a 25-basis-point rate cut from consideration.
Across all maturities, Treasury yields saw an increase, notably with the two-year yield rising to 4.66% and the 10-year yield surging to 4.3%.
The rise in rates had a negative impact on markets, particularly affecting interest-sensitive sectors like technology, consumer discretionary and real estate. Among indices, the tech-heavy Nasdaq 100 performed below its large-cap peers.
Read also: Economists Sound Alarm On Inflation’s Stubborn Grip: ‘No Chance Inflation Will Return To 2%’ Without New Rate Hikes
This Week’s Performance In Major US Indices, ETFs
| Major Indices | Price | % |
| Dow Jones | 38,613.31 | -0.4% |
| S&P 500 | 5,005.49 | -0.48% |
| Nasdaq 100 | 17,674.89 | -1.54% |
| Russell 2000 | 2,032.63 | -1.4% |
This Week’s Performance In Equity Sectors
| Sector | 1-week Return |
| Energy (NYSE:XLE) | 2.73% |
| Materials (NYSE:XLB) | 2.41% |
| Utilities (NYSE:XLU) | 1.58% |
| Financials (NYSE:XLF) | 1.42% |
| Health Care (NYSE:XLF) | 1.11% |
| Industrials (NYSE:XLI) | 0.93% |
| Cons. Staples (NYSE:XLP) | 0.21% |
| Real Estate (NYSE:XLRE) | -0.12% |
| Communications Services (NYSE:XLC) | -0.26% |
| Cons. Discretionary (NYSE:XLY) | -0.46% |
| Technology (NYSE:XLK) | -2.55% |
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