US stocks traded mixed; producer price index allays rate fears

Investing.com– U.S. stocks steadied Friday after the previous session’s sharp losses, with investors relieved that the monthly producer prices report painted a less aggressive inflationary picture.

At 10:05 ET (14:05 GMT), the fell 140 points, or 0.4%, the edged 12 points, or 0.2% lower, while the gained 25 points, or 0.2%.

PPI rises by less than expected in March

U.S. producer prices increased by slightly less than expected in March, with rising 0.2% last month, after rising by 0.6% in February. Economists had expected the PPI to gain 0.3%.

In the 12 months through January, the  increased 2.1%, below the 2.2% expected, after climbing 1.6% in February.

Although prices are still rising, the pace of the increase wasn’t as sharp as expected, something of a relief for investors after Wednesday’s hotter-than-expected consumer price report had raised the prospect of higher-for-longer interest rates.

The CPI reading tied into repeated warnings from Fed officials that sticky inflation will delay any potential interest rate cuts in 2024. 

Additionally, the number of Americans filing new for unemployment benefits fell more than expected last week, suggesting that the labor market remained healthy.

June rate cut bets slump

Wednesday’s hot CPI data, coupled with hawkish-leaning from the Fed’s March meeting, saw traders sharply cut expectations for a 25 basis point hike in June.

Markets are now pricing in a 81.8% chance that the Fed will keep rates steady in June, more than double the 37.1% chance seen last week, the showed.

Markets also see only a 17.5% chance for a June cut, down from 61.1% seen last week. 

Constellation Brands earnings impress

Earnings from Wall Street banks JPMorgan Chase (NYSE:), Citigroup (NYSE:) and Wells Fargo (NYSE:) are due on Friday, with BlackRock (NYSE:), the world’s largest asset manager, also reporting at the end of the week.  

Ahead of this, Constellation Brands (NYSE:) stock rose just under 2% after the drinks giant delivered an earnings beat on the back of strong beer sales.

CarMax (NYSE:) stock slumped 11% after the used vehicle retailer posted a lower fourth-quarter profit, hurt by decreased profitability from units sold.

Elsewhere, Alpine Immune Sciences (NASDAQ:) soared after it said it will be acquired by Vertex Pharmaceuticals (NASDAQ:)

Crude slips after large U.S. inventories build

Oil prices retreated after recent gains as the situation in the Middle East remained fraught, threatening the security of supplies from this crucial oil-rich region.

By 10:05 ET, the U.S. crude futures traded 0.8% lower at $85.50 a barrel, while the Brent contract dropped 0.6% to $89.92 per barrel.

Israel and Hamas have begun a fresh round of negotiations in any attempt to end the more than six-month-old Gaza war, but confidence is not high that these discussions will result in an agreement.

Still, official data, released on Wednesday, showed U.S. oil  grew 5.8 million barrels in the week to April 5, more than expected, and the third consecutive week of outsized growth in U.S. stockpiles.

releases its monthly oil market report later in the session, ahead of the equivalent report from the  on Friday.

(Ambar Warrick contributed to this article.)
 

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