After yesterday’s losses, caution prevails in US stocks ahead of inflation data
US stock indices decline
The Standard & Poor’s 500 index fell by about 0.3%, the Nasdaq Composite Index, which is dominated by technology stocks, by 0.4%, while the Dow Jones Industrial Average fell 84 points by about 0.2%.
The values of shares of major technology companies fell, such as “Meta”, which lost about 2%, while “Alphabet” and “Microsoft” lost about 0.1% each, while the shares of “Tesla” and “Palantir” rose by about 1% and 2%, respectively. .
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Bad news for stock markets
Regarding this, Sam Stovall, chief investment strategist at CFRA Research, said: “If the CPI comes in higher than expected, that will certainly be bad news for stock markets because it means that the Federal Reserve will actually remain slower in lowering interest rates.”
US Producer Price Index
The Producer Price Index, which tracks price changes seen by companies at the wholesale level, rose 3.3% from 3% in November, but less than economists expected.
It also rose 0.2% from the previous month, which was also below expectations, laying the foundation for highly anticipated consumer inflation data on Wednesday.
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Gradual increases in customs duties
Meanwhile, stock investors have closely followed news of President-elect Donald Trump’s team considering rolling out monthly tariff increases rather than imposing higher levels all at once, according to Bloomberg, in an effort to help prevent rising inflation.
The high probability that Trump’s policies will increase price pressures worries markets because that could limit the Fed’s scope for lowering interest rates.
But a UBS analyst said gradual tariffs could remain a “problem” for the central bank’s efforts to finish the job of cooling inflation.
“Positive” US data for stock markets
Wholesale prices rose less than expected in December, allaying some equity investors’ concerns about a return to higher inflation in the United States.
“A higher than expected PPI in December would be positive for markets that have been concerned about higher inflation readings over the past few months,” said Eugenio Aleman, chief economist at Raymond James.
Charlie Ripley, chief investment strategist at Allianz Investment Management, said: “The decline in prices appeared in most components with the exception of energy, where we saw a noticeable increase in gasoline prices last month and some increase in airline prices.”
Energy prices rose 3.5% from November levels, the largest monthly increase since February 2024.
Meanwhile, domestic and international airline prices rose by 7.2%.
Compensation for losses in European stocks
Most European stocks continued to recover some losses after a report that US President-elect Donald Trump may choose to impose gradual increases in tariffs as sectors such as automobiles advance.
The CAC in Paris rose 55 points (0.7%) to reach 7,463, while the DAX in Frankfurt rose 171 points (0.8%) to trade at 20,304, but the FTSE in London fell by two points (0.03%) to reach 8,222.
Asian stock trading
In comparison, earlier in Asian trading, the Nikkei index in Tokyo lost 716 points (1.8%) to close at 38,474 points as investors sold semiconductor stocks after the US government said it would impose more restrictions on exports of chips and artificial intelligence technology, according to the report. RTÉ website
But Hong Kong’s Hang Seng Index rose 345 points (1.8%) to close at 19,220 points – recovering from its lowest level in four months – as sentiment improved after China pledged to take more measures to support fragile markets and economic growth.
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