Stock Market Today: Hot Inflation Data Sinks Stocks
Friday's selloff sent the major benchmarks to their worst week of the year so far.


Selling resumed on Wall Street Friday, with investors spooked by another hot inflation update. A solid reading on consumer sentiment only created stiffer headwinds for the major indexes, with the broad market suffering its worst weekly loss of the year.
Ahead of the opening bell, the Bureau of Economic Analysis said the personal consumption-expenditures (PCE) index, the Fed's preferred measure of inflation that tracks consumer spending, was up 0.6% in January – its biggest monthly increase since last summer. Year-over-year, the PCE index rose to 5.4%, marking its first increase in seven months. Core PCE, which excludes volatile food and energy prices, was also higher than what was seen in December.
"Just days after minutes from the last Federal Reserve meeting showed unanimous support among policy makers for ongoing rate increases, this morning's PCE depicts strong, ongoing inflation and strong consumer spending, strengthening expectations of substantial monetary tightening in the coming months," says José Torres, senior economist at Interactive Brokers.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Separate data showed the University of Michigan's consumer sentiment index rose 3% from January to February to 67, confirming a previously released preliminary report. The increase came amid "improvement in the short-run economic outlook," the report said, though consumers "continued to exhibit considerable uncertainty over short-run inflation."
In single-stock news, Carvana (CVNA) plummeted 20.5% after the online auto dealer reported a sharp year-over-year decline in units sold (-23%) and revenue (-24%) in Q4. CVNA also said it will reduce operating costs by $1 billion by the second quarter, but not with layoffs. "We expect these expense reductions to be broad-based across all large SG&A expense components, but importantly, we do not expect a reduction-in-force to be part of this plan," Carvana said in a letter to shareholders.
As for the major indexes, they finished well off their session lows but were still solidly in the red. The Dow Jones Industrial Average fell 1.0% to 32,816, the S&P 500 shed 1.1% to 3,970, and the Nasdaq Composite dropped 1.7% to 11,394. All three indexes notched their biggest weekly losses of the year.
Where to find defensive portfolio strategies
The road to get inflation down to normal levels will be long and bumpy, says Eric Sterner, chief investment officer at Apollon Wealth Management. And this could give the upper hand to the bears for the time being, Sterner adds, noting that amid this uncertain backdrop, investors "should maintain defensive portfolio strategies in the near term as the Fed will remain hawkish and earnings will continue to be pressured."
There are ample ways investors can employ defensive strategies in their portfolios. These include targeting the best dividend stocks or gaining exposure to consumer staples stocks or utility stocks. Another tactic is to see what the smart money is doing by following their top stock picks. According to regulatory filings, billionaire investors have been busy bargain hunting during this bear market, including scooping up some popular blue chip stocks.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Stock Market Today: Investors Look on the Bright Side
A generally good week closes on another positive note, as investors, traders and speculators look for fresh catalysts.
-
My Three-Day Rule for Investing: And If it Applies Now
Stock Market I've seen a lot in my career. Here's what I see now in the stock market.
-
Stock Market Today: Stocks Climb More Walls of Worry
Volatility is back in a normal range, and the trend for the main equity indexes remains positive despite specific and general headwinds.
-
Is It Time to Invest in Europe?
Stock Market Europe is being shaken out of its lethargy, militarily and otherwise, by Donald Trump's changes in U.S. policy. Should investors start buying?
-
Stock Market Today: Nasdaq Outperforms as Big Tech Rallies
The Dow Jones Industrial Average closed lower for a second day as Amgen and Merck fell.
-
Stock Market Today: UnitedHealth Drags on Dow After CEO Splits
UNH created headwinds for the price-weighted Dow on news that its embattled CEO, Andrew Witty, is stepping down.
-
Stock Market Today: Dow Gains 1,160 Points on U.S.-China Trade Deal
The two countries agreed to a 90-day truce that will give them time to work on more substantive trade negotiations.
-
Stock Market Today: Investors Weigh Weekend Negotiations
Investors, traders and speculators will look to Switzerland for answers about the most compelling issue confronting global markets.