Inflation Data Puts Fed's Next Moves Into Question

After a quiet start to the week, a satisfactory consumer price index (CPI) reading for February pushed the S&P 500 Index (SPX) to a fresh record close. Both the Dow Jones Industrial Average (DJI) and Nasdaq Composite (IXIC) also rallied, as investors rotated back into the tech sector.

However, hesitancy returned before Thursday's producer price index (PPI) reading, which ended up doubling analysts' expectations, sending Treasury yields sharply higher and shutting down interest cut hopes, despite strong retail and jobs data. The DJI was looking to close the week near breakeven on "triple witching" Friday, while the IXIC and SPX were headed for weekly losses.

Tech Overview

There was renewed interest in tech stocks this week. J.P. Morgan Securities initiated coverage of Duolingo (DUOL) with an "overweight" rating, while chip concern Nvidia (NVDA) remained popular in the options pits. Oracle (ORCL) stock surged on a revenue beat, and Intel (INTC) pivoted lower after the Pentagon reportedly pulled plans to spend $2.5 billion on a chip grant. Elsewhere, fintech names Square (SQ) and Paypal (PYPL) saw increased options activity.

Retail Highlights

Retail earnings were still trickling in, with footwear name On Holding (ONON) missing fourth-quarter estimates and issuing a disappointing net sales forecast. Kohl's (KSS) also shared disappointing quarterly and a dismal 2024 outlook, while Petco (WOOF) beat top-line estimates. Rising consumer prices bolstered China e-tailer Pinduoduo (PDD), while a C-suite shakeup dinged Under Armour (UAA). Lastly, Dick's Sporting Goods (DKS) hit a record high after earnings.