The U.S. stock market struggled Thursday, with the Dow Jones Industrial Average (DJI), S&P 500 (GSPC), and Nasdaq Composite (IXIC) all closing in the red. Persistent inflation concerns and rate-cut speculations have kept investors on edge.
The S&P 500 dipped 0.5%, while the Nasdaq lost 0.6%. The Dow slid 234 points, reflecting a cautious mood across markets. A sharper-than-expected rise in the Producer Price Index (PPI) added to concerns, signaling that inflation may remain sticky longer than anticipated.
Inflation Data Casts Doubt
Fresh inflation data shook confidence in the Federal Reserve’s path forward. The PPI for November jumped by 0.4%, surpassing economists’ forecast of 0.2%. While Wednesday’s Consumer Price Index (CPI) had offered some relief, this latest data puts a question mark over potential interest rate decisions.
The Federal Reserve is expected to cut rates by 0.25% in December, with CME FedWatch tool odds nearing 99%. However, January’s outlook remains uncertain, with officials expressing cautious views on easing monetary policy.
Tech Giants and Earnings Woes
The tech-heavy Nasdaq took a hit, with Nvidia (NVDA) and Adobe (ADBE) among the biggest losers. Adobe’s disappointing revenue outlook, influenced by slower returns on AI investments, sent its shares down nearly 14%.
Meanwhile, Apple (AAPL) defied the trend, hitting record highs, reflecting investors’ trust in its long-term growth strategy.
What Lies Ahead?
With a Fed meeting just a week away, traders are closely monitoring inflation trends and economic signals. Some strategists predict further market corrections if inflation remains stubborn.
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