Major indexes are lower after January CPI data showed a greater-than-expected rise in inflation.
Portfolio Pulse from Benzinga Newsdesk
Major stock indexes declined following the release of January CPI data, which indicated a higher-than-anticipated increase in inflation. This has raised concerns about the potential for continued aggressive monetary policy by the Federal Reserve.
February 13, 2024 | 3:29 pm
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NEGATIVE IMPACT
The Dow Jones Industrial Average ETF (DIA) likely experienced a decline as the index it tracks is sensitive to inflation data and the potential for increased interest rates.
As DIA tracks the Dow Jones Industrial Average, higher-than-expected inflation data typically leads to concerns about higher interest rates, negatively impacting stock prices.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
The Russell 2000 ETF (IWM), which tracks small-cap stocks, may see a short-term negative impact due to fears of tighter monetary policy affecting smaller companies more acutely.
Small-cap stocks, tracked by IWM, are often more sensitive to economic shifts. Higher inflation could lead to tighter monetary policy, disproportionately affecting these companies.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
The NASDAQ-100 ETF (QQQ) could face downward pressure as tech stocks are particularly vulnerable to rising interest rates, which may result from the inflation data.
Tech stocks, which make up a significant portion of QQQ's holdings, tend to underperform in high-interest-rate environments caused by inflationary pressures.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
The S&P 500 ETF (SPY) likely saw a decline as the broader market reacts negatively to the unexpected rise in inflation, which could lead to more aggressive rate hikes.
SPY, which tracks the S&P 500, is broadly impacted by inflation data as it affects overall market sentiment and the likelihood of the Federal Reserve increasing interest rates.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 80