Traders Look Ahead to Inflation Data Amid Monday Market Jitters

Barry Adams
11 Mar, 2024
New York City

Stocks struggled in Monday's trading, and benchmark indexes extended the previous week's losses as investors looked ahead to the release of inflation data later in the week. 

The S&P500 index and the Nasdaq Composite declined 0.5% in early trading in New York, and investors debated the future rate path and labor market conditions. 

Last week, stock market indexes declined, and investors focused on labor market updates and overlooked international trade data.

U.S. nonfarm payrolls expanded at a healthy pace in February, and the growing job market also enticed more people to apply for jobs, which in turn increased the jobless rate to a 2-year high, and annual wage gains decelerated to 4.3%.

Moreover, job openings edged slightly lower but remained at a high level, indicating that labor market conditions are healthy, despite multiple rate hikes over the last two years.

The yield on Treasury notes declined on the growing optimism that policymakers are more likely to cut rates as early as June, providing another boost to the stock market advance and driving gold to a record high.

Traders are anticipating that February's consumer price inflation will rise by 0.4% on a monthly basis and 3.0% from a year ago, according to a survey conducted by Ticker.com. 

Core inflation, which excludes volatile food and energy prices, is expected to rise 0.3% from the previous month and advance at a faster pace of 3.7% from a year ago. 

The U.S. Bureau of Labor Statistics is set to release inflation data on Tuesday and producer price index data on Thursday. 

Despite multiple interest rate hikes over the last two years, inflation has still stayed well above the Federal Reserve's target rate of 2%, and bringing down inflation may require higher interest rates to stay longer, contrary to the market's expectations. 

 

U.S. Indexes and Yields

The S&P 500 index decreased 0.2% to 5,113.50, and the Nasdaq Composite fell 0.2% to 16,052.06. 

The yield on 2-year Treasury notes increased to 4.51%, 10-year Treasury notes inched up to 4.07%, and 30-year Treasury bonds edged down to 4.24%.

WTI crude oil decreased $0.87 to $77.21 a barrel, and natural gas prices decreased 3 cents to $1.78 a thermal unit.

Gold increased by $1.30 to $2,178.70 an ounce, and silver rose 13 cents to $24.43. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 103.83.

 

U.S. Stock Movers

Cryptocurrency stocks advanced after Bitcoin surged above $71,000 in the hopes that the U.K. securities regulator may approve retail investing in the digital currency through an exchange-traded note vehicle. 

MicroStrategy soared 9%, Coinbase advanced 6%, and Marathon Digital jumped 5%. 

Artificial intelligence applications and infrastructure-related stocks declined in Monday's trading. 

Nvidia declined 1%, Super Micro dropped 3%, Broadcom fell 1%, and Advanced Micro Devices eased 2%.