Inflation data and interest rates impact U.S. stocks lower

U.S. stocks fell on Thursday after new inflation data was released, clouding investor confidence in upcoming interest rate changes. According to Yahoo Finance, the Dow Jones Industrial Average (^DJI) was essentially unchanged, the S&P 500 (^GSPC) fell about 0.2%, and the Nasdaq Composite (^IXIC) fell 0.5%.

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The inflation data continued the earlier narrative that the consumer price index was stimulating the market, briefly pushing the Nasdaq above the 20,000-point mark. The key data cleared the way for expectations of a rate cut by the Federal Reserve in December, a move that market observers all but confirmed.

However, the producer price index exceeded expectations in November, rising 0.4%, higher than the 0.2% expected, fueling speculation about the Fed’s next move in January. As the financial world digested these insights, the Swiss National Bank unexpectedly cut interest rates by 0.5%, the largest rate cut in nearly a decade, while markets awaited further instructions from the European Central Bank expected later in the day.

On the corporate front, Adobe’s (ADBE) cautious revenue forecast added to the lackluster sentiment. The software giant blamed its woes on lower-than-expected returns on its artificial intelligence investments, sending its shares tumbling about 12% in early trading. At the same time, data from the IndexBox platform shows that industries sensitive to interest rates and inflation, such as housing and consumer goods, are particularly affected by these macroeconomic changes, highlighting the importance of dealing with inflationary pressures in today’s complex market environment.

Source: IndexBox Market Intelligence Platform