Stocks Hold Gains As Traders Opt To Challenge Fed On Hot Inflation Data; Bonds, Gold Fall: 10 ETFs Moving Tuesday
Portfolio Pulse from Piero Cingari
Following a CPI report indicating higher-than-expected inflation in February 2024, U.S. stocks maintained gains, while bonds and precious metals fell. The report showed a 3.2% year-over-year increase in CPI, with core CPI at 3.8%. Despite this, market expectations for a June rate cut remained at 70%. ETFs like TLT and GLD fell, while SPY, QQQ, and sector-specific ETFs like XLP and XLU showed mixed performance. Notably, ORCL and NVDA stocks surged, while LUV faced a significant drop.
March 12, 2024 | 2:38 pm
News sentiment analysis
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POSITIVE IMPACT
Invesco QQQ Trust rose 0.4%, reflecting a positive sentiment in tech stocks following the inflation report.
Tech stocks, as represented by QQQ, often perform well in inflationary environments, indicating growth potential.
CONFIDENCE 70
IMPORTANCE 65
RELEVANCE 75
POSITIVE IMPACT
SPDR S&P 500 ETF Trust traded 0.3% higher, showing resilience despite the inflation report, with a positive short-term outlook.
SPY's gain indicates a positive market sentiment, possibly due to expectations of continued economic growth.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
Consumer Staples Select Sector SPDR Fund outperformed, up 0.4%, likely due to investors seeking defensive positions.
Consumer staples are considered a safe haven during inflationary periods, leading to XLP's gain.
CONFIDENCE 65
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
SPDR Gold Trust fell 0.9%, breaking a nine-day winning streak, likely due to the inflation data making rate cuts less probable.
Gold, being rate-sensitive, tends to fall when inflation data suggests less likelihood of rate cuts.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 85
NEGATIVE IMPACT
iShares 20+ Year Treasury Bond ETF fell 0.7% following the inflation report, indicating a negative short-term impact due to rising yields.
Higher inflation typically leads to higher yields, negatively impacting bond prices, as seen with TLT's drop.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
Utilities Select Sector SPDR Fund fell 0.4%, lagging behind other sectors, possibly due to inflation concerns.
Utilities often underperform in inflationary environments due to their fixed income-like characteristics.
CONFIDENCE 60
IMPORTANCE 55
RELEVANCE 65