Stock Indices Stumble Before Producer Price Index Report
Stocks fell on Friday before the the release of new inflation data and tech stocks were hit the hardest.
Quick overview
- All three major U.S. stock indices fell on Friday ahead of the Labor Department's Producer Price Index release.
- The Dow Jones dropped 0.8%, the Nasdaq fell 0.6%, and the S&P 500 decreased by 0.6%, influenced by poor tech stock performances.
- CoreWeave's stock plummeted 12% in premarket trading due to concerns over high capital expenditures for new data centers.
- The upcoming PPI report is expected to show a 0.3% increase, which may negatively impact the stock market's recent gains.
The top three U.S. stock indices all fell on Friday as the market opened and before the release of the Labor Department’s Producer Price Index.
Key inflation data is set to release today showing the cost of producer prices and how they have moved. Just before that report was scheduled for release, the Dow Jones dipped 0.8% while the Nasdaq fell 0.6%. The S&P 500 decreased by 0.6% as well, hurt by poor performances from some important tech stocks.
Stocks continued Thursday’s downward trend amid worry over new tariffs, rising tensions between the United States and Iran, and the looming threat of AI job disruption. Tech stocks related to the AI industry are some of the worst hit this week, with Nvidia (NVDA) losing 7.6% of its value over the last two days.
Stock Market Roundup for Friday Shows Widespread Losses
The week started off strong for the stock market with investors reacting well to President Doanld Trump’s State of the Union address. However, changes to tariff policy that could end with 15% global tariffs soured the otherwise positive economic news and kept stocks from holding onto new gains.
CoreWeave (CRWV) lost 12% in premarket trading Friday after posting their quarterly earnings. Investors were obviously worried about capital expenditures for the cloud infrastructure business and their plans to build massive data centers. They are trying to get out in front of the rising demand for AI services, but their extraordinary capex spending has sunk investor confidence at a time when the market is worried about profitability for AI-focused businesses.
The Labor Department will be releasing its January numbers for the Producer Price Index (PPI) today. That metric of inflation is expected to increase by 0.3%, along with a year-to-year increase of about 2.8%. That would hurt the positive economic outlook that the President created during his address earlier this week, further holding back gains across the stock market.
This incredibly mixed week for stock market movement is likely to end about where it started or slightly lower after the PPI is processed. The bullish movement in the middle of the week is probably going to be wiped out by slightly negative inflation news that could keep the Federal Reserve from issuing new rate cuts just a little bit longer. We anticipate that CoreWeave’s poor performance on the stock market today will further hold back tech stocks in the coming weeks and perpetuate the fears that overspending and low profitability are rampant problems among tech companies.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
- Read our latest reviews on: Avatrade, Exness, HFM and XM
Save