Stocks have made a recovery after an initially rough trading day on Monday. Despite its shaky start, the Dow rose above its initial position at one point, though it's currently down by 4.14 points or a decrease of less than a tenth of a percent after falling approximately 240 points earlier in the day. Concurrently, the S&P 500 is down 11.65 points or 0.2 percent at 5,112.04, and the Nasdaq lags by 61.06 points or 0.4 percent at 16,024.05.
This early instability on Wall Street was due to uncertainty regarding the outlook for interest rates in view of the imminent release of significant inflation data. A highly anticipated report on consumer price inflation for February from the Labor Department is due on Tuesday. Current forecasts project a 0.4 percent rise in consumer prices for February following a 0.3 percent increase in January. The core consumer prices, omitting food and energy prices, are expected to show a 0.3 percent rise in February compared to an escalation of 0.4 percent in January.
However, the yearly consumer price growth rate is expected to remain constant from the previous month at 3.1 percent, while the annual core consumer price growth is predicted to drop to 3.7 percent from 3.9 percent. This inflation data could significantly influence interest rates as the Federal Reserve has stated it needs more assurance that inflation is decelerating before pondering over rate cuts.
While the Fed is likely to maintain rates at the monetary policy meeting next week, the data could influence predictions as to when the central bank will eventually reduce rates. Another report on producer price inflation for February is due from the Labor Department on Thursday. Anticipations project that producer prices will see a 0.3 percent rise in February as in January although the annual rate of producer price growth is expected to accelerate to 1.2 percent from 0.9 percent.
In the coming days, reports on retail sales, industrial production and consumer sentiment will also generate noteworthy attention.
Sector News highlights that despite an overall market recovery, semiconductor stocks continue to destabilize, demonstrated by the 1.6 percent drop in the Philadelphia Semiconductor Index. Semiconductor equipment maker Applied Materials saw a 2.5 percent decline despite a dividend increase from $0.32 to $0.40 per share. The steel sector also suffered, evidenced by the 1.5 percent loss by the NYSE Arca Steel Index.
However, gold stocks have soared, with a 2.5 percent increase in the NYSE Arca Gold Bugs Index, following a minor rise in gold prices for April delivery to $2,188.60 an ounce.
Internationally, Asian-Pacific markets experienced a mixed day, with Japan's Nikkei 225 Index dropping by 2.2 percent and Hong Kong's Hang Seng Index rising by 1.4 percent. European markets also showed varied results, with the UK's FTSE 100 Index rising by 0.1 percent while the French CAC 40 Index and the German DAX Index fell by 0.1 percent and 0.4 percent respectively.
Treasuries held their position after closing at almost the same level last Friday. Currently, the yield on the benchmark ten-year note, which inversely relates to its price, rose by less than a basis point to 4.094 percent.
