Stocks were volatile Thursday as investors took in more inflation data and considered how it could impact the Federal Reserve's plans for interest rates. Wall Street also looked ahead to first-quarter earnings season, which unofficially kicks off tomorrow as several big banks report.
Following Wednesday's hotter-than-expected March Consumer Price Index (CPI) – which sent stocks into a tailspin – investors cheered some encouraging aspects of this morning's Producer Price Index (PPI).
Specifically, data from the Bureau of Labor Statistics showed the PPI, which measures what businesses are paying suppliers for goods, rose 0.2% month-to-month in March. This was the slowest monthly increase since November and lower than economists anticipated. On an annual basis, though, headline PPI was up 2.1%, the quickest pace since April 2023.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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.
The increase in core PPI, which excludes volatile food and energy prices, also slowed on a monthly basis (0.2% vs February's 0.3%), but increased year-over-year (2.8% vs February's 2.7%).
"Although today's PPI reading was constructive, we believe that investors should be prepared for fewer Fed rate cuts this year, one or two, and for a first potential rate cut not until the July meeting," says Larry Tentarelli, president and founder of Blue Chip Daily Trend Report.
Several Federal Reserve officials, including Boston Fed President Susan Collins, sounded off on inflation and interest rates after today's PPI report. In a speech to the Economic Club of New York, Collins said recent inflation data highlights "uncertainties related to [the] timing" of rate cuts and reiterates "the need for patience."
Nike gets upgraded to Buy at BofA
In single-stock news, Nike (NKE) popped 3.4% after BofA Securities analyst Lorraine Hutchinson upgraded the Dow Jones stock to Buy from Neutral (the equivalent of Hold).
"Nike is currently trading at historic trough levels compared to the S&P 500," Hutchinson writes in a note to clients, adding that "this is unwarranted for a strong brand with solid growth prospects." The analyst notes that while China remains a risk for Nike, the company is taking bold steps to transform and it could benefit from this year's Summer Olympics.
Hutchinson also says analysts' estimates are bottoming and the BofA team "would rather own Nike when consensus calls for a mid-single-digit growth rate" versus elevated expectations.
CarMax skids after earnings
Elsewhere, CarMax (KMX) plunged 9.2% after the used car retailer reported earnings. For the three months ended February 29, the company disclosed earnings of 32 cents per share on $5.6 billion in revenue. Analysts, meanwhile, were anticipating earnings of 46 cents per share on $5.8 billion in sales.
CarMax also pushed back its deadline to sell more than 2 million vehicles (both retail and wholesale), now expecting to reach this goal between fiscal 2026 and fiscal 2030 vs its previous forecast of fiscal year 2026.
As for the main indexes, the Nasdaq Composite outperformed, adding 1.7% to 16,442, thanks to strength in several Magnificent 7 stocks including Alphabet (GOOGL, +2.1%), Apple (AAPL, +4.3%) and Nvidia (NVDA, +4.1%). The S&P 500 rose 0.7% to 5,199, while the Dow Jones Industrial Average finished marginally lower at 38,459.
Earnings season starts tomorrow
Looking ahead, the Q1 earnings calendar starts to heat up tomorrow with several of the country's largest banks set to report. Among them is JPMorgan Chase (JPM, -0.02%), which is expected to see modest year-over-year declines in earnings and revenue.
According to John Butters, senior earnings analyst at FactSet Research Systems, the estimated Q1 earnings growth rate for the S&P 500 is 3.2%. If this is the actual growth rate, it will mark the third straight quarter of year-over-year earnings growth for the index, Butters adds.
Related content
- Costco Hikes Its Dividend: What Income Investors Need To Know
- Kiplinger Trade Outlook: Imports and Exports Rise Strongly in February
- How Interest Rates Impact Stock Prices
-
Four Spa Retreats for Well-Heeled RetireesWe hand-picked these U.S. spa retreats for their serenity, amenities and dedication to the comfort of older travelers. All are located in the Continental U.S.
-
Four Military Benefits That Have Helped My FamilyMilitary life can be challenging for servicemembers and their families, but they're offered some significant financial benefits to help cushion the blow.
-
Why More Americans Are Redefining Retirement, Just Like I DidRetirement readiness requires more than just money. You have a lot of decisions to make about what kind of life you want to live and how to make it happen.
-
3 Major Changes Investors Must Prepare for in 2026A possible stock market bubble. Trump accounts. Tokenized stocks. These are just three developments investors need to be aware of in the coming months.
-
A Compelling Case for Why Property Investing Reigns Supreme, From a Real Estate Investing ProInvestment data show real estate's superior risk-adjusted returns and unprecedented tax advantages through strategies like 1031 exchanges and opportunity zones.
-
Stocks Close Out Strong Month With Solid Amazon Earnings: Stock Market TodayAmazon lifted its spending forecast as its artificial intelligence (AI) initiatives create "a massive opportunity."
-
Are You Retired? Here's How to Drop the Guilt and Spend Your Nest EggTransitioning from a lifetime of diligent saving to enjoying your wealth in retirement tends to be riddled with guilt, but it doesn't have to be that way.
-
Government Shutdown Freezes National Flood Insurance Program: What Homeowners and Buyers Need to KnowFEMA's National Flood Insurance Program is unavailable for new customers, increased coverage or renewals during the government shutdown.
-
Separating the Pros From the Pretenders: This Is How to Tell if You Have a Great AdviserDo you leave meetings with your financial adviser feeling as though you've been bulldozed into decisions or you're unsure of what you're paying for?
-
What Netflix Stock's 10-for-1 Split Means for InvestorsNetflix announced its long-awaited stock split after Thursday's close. NFLX will start trading on a split-adjusted basis ahead of the November 17 open.
