The S&P 500 (SPX) dropped on Friday after the release of January’s Personal Consumption Expenditures (PCE) report, which showed a 2.5% annual inflation rate. This matches economists’ expectations but falls short of what investors were hoping for to sway the Federal Reserve’s pause on interest rate cuts.
The PCE data is crucial for measuring the US economy and has led to increased interest rates in recent months. Despite this, it remains above the central bank’s 2% target. As a result, two more interest rate cuts are expected this year.
Investors took note of this when the SPX fell 0.19% in early morning trading, extending its year-to-date loss to 0.34%. The decline also hurt the sector’s 52-week gains of 15.02%.
Tech and communication services stocks were hit hardest today, as many tech stocks struggle under increased interest rates. Notably, Nvidia’s latest earnings report was a factor in the decline.
For those interested in investing in the S&P 500, options include buying individual stocks within the index or purchasing an exchange-traded fund (ETF) that tracks it. The SPDR S&P 500 ETF Trust is a popular choice for investors betting on the S&P 500’s performance.
Source: https://www.tipranks.com/news/sp-500-slips-alongside-inflation-data