S&P 500 (SPY) Report – 02/16/24

Good morning, traders!

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

US stocks faced a decline at the opening on Friday, following a hotter-than-expected inflation report which dampened hopes for imminent interest rate cuts by the Federal Reserve. The S&P 500 dropped slightly, ending a streak of gains, while the Dow Jones Industrial Average fell by 0.3%, and the Nasdaq Composite showed volatility. The producer price index (PPI), an important indicator of wholesale inflation, rose by 0.3% in January, surpassing the anticipated 0.1% increase expected by economists, signaling persistent inflationary pressures.

The stock market experienced fluctuations throughout the week, influenced by mixed economic data that led investors to continually reevaluate their expectations for the US economy, Federal Reserve policy, and the timing of interest rate reductions. Despite the Dow losing 500 points earlier in the week due to a surprise surge in consumer inflation, the market managed to recover, driven by a significant drop in retail sales. This recovery put the Dow and the S&P 500 in a position to end the week with gains.

In company news, Coinbase’s stock surged over 14% after the cryptocurrency exchange reported its first quarterly profit in two years, highlighting investor optimism in certain sectors. Similarly, Applied Materials saw a jump in its stock price by over 9%, buoyed by positive forecasts indicating a potential rebound in the chip sector. These movements illustrate how specific corporate earnings reports can influence market sentiment and stock performance.

The week concluded with the market digesting another inflation report that suggested inflation might be more persistent than previously thought, potentially delaying Federal Reserve rate cuts. Despite these challenges, the S&P 500 managed a marginal weekly gain, while the Dow was poised for a modest increase. The mixed outcomes reflect ongoing concerns about inflation and interest rates, as well as the impact of corporate earnings and economic indicators on market dynamics.

Friday Economic Events:
Housing Starts and Permits 8:30am ET
PPI-Final 8:30am ET – High Volatility Expected
Michigan Consumer Sentiment 10:00am ET
Michigan Inflation Expectations 10:00am ET
Baker Hughes Rig Count 1:00pm ET

Fed Speaker Scheduled:
Michael Barr 9:10am ET
Mary Daly 12:10pm ET

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