Stocks Experience Mixed Fortunes Amid Inflation Concerns and Industry Challenges
The stock market started the week on a positive note, with the S&P 500 index setting a new record high close for the 17th time in 2023. However, optimism began to fade as investors grew increasingly concerned about inflation and other economic challenges.
Record Highs for Gold, Bitcoin, and Stocks
The S&P 500’s record-breaking performance came despite a higher-than-expected increase in consumer prices and rising energy costs. Gold reached an all-time high of $2,188.60 per ounce, while bitcoin hit a record $73,000 per coin due to expectations that the Federal Reserve would cut interest rates.
Market Correction and Retreating Commodities
However, stocks began to shed some of their gains mid-week. The Dow Jones Industrial Average fell 206 points, or 0.5%, and both the S&P 500 and Nasdaq Composite declined by 0.7% and 1%, respectively. Gold and bitcoin also retreated from their record levels, with gold settling at around $2,150 per ounce and bitcoin dropping below $70,000.
US Wholesale Inflation Rises at Its Fastest Pace in Months
The latest Producer Price Index report revealed that US wholesale inflation rose 1.6% for the 12 months ended in February, marking its fastest increase since last year. This news caused the Dow to plunge more than 300 points at its lowest point on Thursday before paring losses.
Airline Stocks Take a Hit from Boeing Woes and Industry Challenges
Airline stocks were also hit hard this week, with the NYSE Arca Global Airline index on track to end the week 2.2% lower. Boeing shares dropped 7.7%, and Southwest Airlines saw a nearly 18% decline in value following the delivery delay and safety concerns with its fleet of Max 8 aircraft.
Longest Stretch Without a Significant Market Decline
It’s important to note that the S&P 500 hasn’t experienced a one-day decline of 2% or more since last February. This marks the longest such stretch since February 2018, according to Liz Young, head of investment strategy at SoFi.
Upcoming Events and Economic Data
Next week, investors will have several significant economic data releases and corporate events to keep an eye on. Notable events include Nvidia’s Global artificial intelligence Conference for developers, Super Micro Computer joining the S&P 500 index, and the Federal Reserve’s two-day policy meeting.
Wall Street will also be closely monitoring a range of housing market reports, including the National Association of Home Builders/Wells Fargo Housing Market Index, housing starts data from the Census Bureau, and the monthly existing home sales report from the National Association of Realtors.
