Thomson Reuters
- US stocks fell Thursday as an increase in wholesale prices heightened inflation worries.
- That followed a higher-than-expected increase in consumer prices.
- Fed officials Loretta Mester and James Bullard said further rate hikes are warranted.
US stocks finished in the red Thursday after hotter-than-expected wholesale price data was followed by two Federal Reserve officials saying they would back upsizing rate hikes to ease inflationary pressures.
None of the 11 sectors on the S&P 500 rose, with the broad pullback set off by the Labor Department's producer price index report showing a 0.7% increase in January after a 0.2% dip in December.
"[Coupled] with a hotter-than-expected Consumer Price Index (CPI), markets have priced in a Federal Reserve probability of more rate hikes than initially anticipated," Quincy Krosby, chief global strategist at LPL Financial, said in a note. "With the futures market now pricing in a strong probability of two more 25-basis-point rate hikes this year, probability is edging higher for a third hike."
Here's where US indexes stood at the 4 p.m. closing bell on Thursday:
- S&P 500: 4,090.41, down 1.38%
- Dow Jones Industrial Average: 33,696.85, down 1.26% (431.20 points)
- Nasdaq Composite: 11,855.83, down 1.78%
Earlier Thursday, Cleveland Fed President Loretta Mester said she saw "a compelling economic case for a 50-basis-point increase" in the fed funds rate and that more rate hikes are likely need to pull down inflation.
Separately, St. Louis Fed President James Bullard reportedly said more rate increases will "lock in" slowing inflation, even alongside an economic expansion.
Here's what else is happening today:
- George Soros' fund revealed it's betting against crypto-friendly bank Silvergate.
- Mike Novogratz said he'll be "the happiest guy" if bitcoin ends the year at $30,000 given the crypto market headwinds.
- A luxury-buying spree is propelling shares of companies like Gucci owner Kering and Hermes.
- Berkshire Hathaway's Charlie Munger said Elon Musk is gifted but weird - and ranks Tesla-rival BYD among his best bets.
- Billionaire investor David Tepper trimmed his Meta position last quarter.
In commodities, bonds, and crypto:
- West Texas Intermediate crude fell 0.2% to $78.08 per barrel. Brent crude, the international benchmark, slipped 0.7% to $84.72.
- Gold rose 0.2% to $1,848.10 per ounce.
- The 10-year Treasury yield climbed 5.6 basis points to 3.863%.
- Bitcoin rose 1.7% to $24,584.11.