The Nasdaq Composite exhibited a notable uptick of 0.75%, culminating in a new closing milestone at 16,511.18. Similarly, the Dow Jones Industrial Average witnessed a commendable increase of 126.60 points, or 0.32%, reaching a closing figure of 39,558.11. The S&P 500 also registered a gain of 0.48%, concluding the session at 5,246.68.
April’s producer price index reading exceeded projections, tempering anticipations of potential rate cuts by the Federal Reserve later in the year. The PPI experienced a 0.5% uptick from the preceding month, surpassing the 0.3% forecast by economists polled by Dow Jones.
Initially, the market responded with skepticism, yet the impact was mitigated as the March wholesale prices data underwent a downward revision, indicating a 0.1% decline. This adjustment alleviated concerns regarding persistent high prices. Moreover, traders exercised caution in interpreting this report, mindful of the imminent release of the more pivotal consumer price index scheduled for Wednesday.
Megan Horneman, Chief Investment Officer at Verdence Capital Advisors, pointed out that some investors may not have fully factored in the potential for prolonged inflation at these elevated levels. She remarked, “The market is a little bit complacent — they’ve gotten accustomed to dovish rhetoric from Powell. In our opinion, the longer this market continues to ignore what’s going on in the inflation category, the bigger decline we can see at some point.”
Market sentiment also reacted to statements made by Federal Reserve Chair Jerome Powell, who emphasized the necessity for patience in navigating unexpectedly high inflation.
The Dow, after concluding its longest winning streak since December, encountered its first loss in nine sessions. Similarly, the S&P 500 marginally retreated on Monday, whereas the Nasdaq saw a slight rise. Stocks faced pressure following a report from the New York Federal Reserve on Monday, revealing an increase in consumers’ inflation expectations for both the short and long term throughout April.
