Stock Markets Slip on 2.4% Consumer Price Index Reading
Stocks tumbled on Wednesday and continued their decline Thursday after the CPI report came in line with expectations.
Quick overview
- The Consumer Price Index report indicated inflation at 2.4%, aligning with expectations, yet the stock market saw a slight decline.
- Core CPI rose by 0.2% for the month, reaching an annual rate of 2.5%, contributing to a drop in the Dow to a four-month low.
- Despite the overall market retreat, technology stocks, particularly AI-related companies like Oracle and Nvidia, showed strong performance.
- Inflation remains above the Federal Reserve's target but is not worsening, providing some reassurance to investors amid geopolitical tensions.
On Wednesday, the Consumer Price Index report showed that prices rose to 2.4%, in line with expectations, but the stock market still decreased slightly on Thursday morning.
Core CPI increased by 0.2% for the month to hit 2.5% annually, and that was exactly what Wall Street expected. The Dow fell to a four-month low on the news, likely feeling pressure from rising oil prices and global economic tightening caused by fighting in the Middle East.
The stock market retreats on Wednesday were relatively small but added to weeks of decline due to the war between Iran and the United States and the impact that has had on the energy sector primarily. There is concern that oil shortages are going to hurt the global economy even with the EIA planning to release 400 barrels to countries in need.
AI Stocks Continue to Impress
It looks like technology stocks are still somewhat bullish and AI stocks in particular are performing well right now. At the top of the upswing is Oracle (ORCL). After reporting quarterly earnings that beat expectations, the company’s stock climbed 9%. They were able to increase their forecasted revenue for 2027 as well.
Nvidia (NVDA) is still the company with the highest market capitalization, and they have held on to some minor gains this week. Their reasonably strong performance during the Iran crisis has helped to dispel fears that AI companies are floundering in debt and are going to crash and burn on heavy capex spending. At $184 per share, they are above where they were three months ago in mid-December but are not climbing at the exceptional rate we have seen for much of the past few years.
Other tech stocks that performed very well this week included Micron Technology (MU) and Intel Corp (INTC). These companies added 3.86% and 2.57% respectively over the last 24 hours. The tech boom that we saw last week is still ongoing and is boosting the positions of formerly struggling AI-related technology stocks. This sector as well as the energy sector are likely to be where the biggest gains happen over the next few weeks.
Inflation is holding for now, remaining above the Federal Reserve’s target of 2% but not worsening. That is good news during a time when investors fear that changing tariffs and Middle East unrest will drastically alter inflation rates. Even though stocks dipped late Wednesday and early Thursday, they may correct slightly in the next 48 hours.
- 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
Related Articles
Sidebar rates
Related Posts
Save
