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(Bloomberg) -- Stock futures fluctuated after another stronger-than-estimated inflation reading reinforced bets the Federal Reserve will keep rates steady for now.
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S&P 500 contracts were little changed. The yield on 10-year Treasuries declined three basis points to 4.60%. The Bloomberg Dollar Spot Index was little changed
The producer price index for final demand rose 0.4% from a month earlier following an upwardly revised 0.5% increase in December, according to a Bureau of Labor Statistics report released Thursday. The median forecast in a Bloomberg survey of economists called for a 0.3% gain in January. Compared with a year ago, the PPI increased 3.5%.
The data serves as further evidence that inflation progress has at least stalled — if not in danger of being reversed. Combined with a solid labor market, it will likely keep the Federal Reserve on hold for the foreseeable future. Policymakers are also awaiting further clarity on President Donald Trump’s policies, particularly tariffs, which are already causing consumer inflation expectations to rise.
Trump said he would announce reciprocal tariffs on Thursday, promising to deliver on his threat to slap tariffs on imports from countries that impose higher duties on US goods. Currencies of economies at the heart of the trade tensions with the US immediately reacted, with the euro paring gains and the Mexican peso lagging major currencies versus the dollar. Meanwhile, haven currencies like the Swiss Franc and Japanese yen held higher, outperforming peers.
A bearish trade is looming for US equities, according to Goldman Sachs Group Inc.’s Scott Rubner.
The market is increasingly crowded and dip-buying is running out of steam, Rubner said. The managing director for global markets and tactical specialist was rightfully bullish heading into 2025, while touting an upcoming negative turn. In a note on Wednesday, he said this was his “last bullish email” for the first quarter.
“Everyone is in the pool, including retail traders, 401k inflows, start of the year allocations, and corporates,” he said. “The flow demand dynamics are quickly changing, and we are approaching negative seasonals.”
Corporate Highlights:
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Apple Inc.’s iPhones will use Alibaba Group Holding Ltd.’s AI technology, the Chinese firm’s chairman said, affirming reports the e-commerce pioneer had scored a coveted role in helping power the iPhone in the world’s top mobile arena.
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Cisco Systems Inc. gave an upbeat sales forecast for the current quarter, helped by companies spending more on computing infrastructure to take advantage of AI technology.
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Deere & Co. slid as the world leader in farm machinery anticipates another challenging year.
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Robinhood Markets Inc. reported revenue that more than doubled as the online trading firm was buoyed by crypto-market transactions around the US presidential election.
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Reddit Inc.’s fourth-quarter user growth missed Wall Street’s expectations, a sign the newly public company is struggling to keep up with larger digital advertising peers Meta Platforms Inc. and Google.
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Barclays Plc shares plunged after the British bank left its earnings guidance for next year unchanged.
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Nestle SA climbed after sales growth at the world’s biggest foodmaker edged up from historically low levels in the final quarter of last year.