S&P 500 (SPY) Report – 02/13/24

Good morning, traders!

The S&P 500 ($SPY) is trading below yesterday’s close. Let’s get into it…

Stock futures fell sharply on Tuesday following the release of January’s inflation data, which was hotter than expected. This unexpected increase in inflation raised concerns about the Federal Reserve’s ability to cut interest rates multiple times throughout the year, a crucial aspect for bullish investors in the equity market. The Dow Jones Industrial Average futures dropped by 0.9%, S&P 500 futures fell by 1.2%, and Nasdaq 100 futures saw a 1.7% decrease, indicating a potential shift in market sentiment.

The inflation report showed a 0.3% rise in the Consumer Price Index (CPI) for January from the previous month, and a 3.1% increase on an annual basis, surpassing the predictions of economists. The core CPI, which excludes volatile items like food and energy, also exceeded expectations by rising 0.4% month over month and 3.9% from a year ago. These figures suggest that inflation is cooling at a slower pace than anticipated, challenging the view that the economy is on a straightforward path to lower inflation rates.

The report’s impact was immediately felt in the bond market, where the yields on 2-year and 10-year Treasury notes jumped to 4.6% and 4.27%, respectively. This rise in yields led to a downturn in technology stocks, such as Nvidia, Microsoft, and Amazon, which had previously benefited from declining rates. Their premarket trading losses exceeded 1%, reflecting investors’ concerns over the inflation data’s implications for interest rates and stock valuations.

Additionally, the broader market’s attention is on upcoming corporate earnings reports from companies like Coca-Cola, Shopify, and Airbnb, which could influence market trends. Meanwhile, Bitcoin’s price hovered below $50,000, marking a significant recovery for the cryptocurrency. This array of financial news highlights the interconnectedness of various market factors and their collective impact on investment strategies and economic outlooks.

Tuesday Economic Events:
NFIB Small Business Index 6:00am ET
CPI 8:30am ET – High Volatility Expected
Redbook Sales 8:55am ET
API Crude Oil Report 4:30pm ET

Fed Speaker Scheduled:
No Fed Speakers Scheduled

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