Stocks opened higher Thursday as investors took in some early morning updates on inflation and consumer spending. The positive price action quickly faded, though, as a selloff in semiconductor stocks sent the main indexes into the red.
Thursday's busy economic calendar included the February Producer Price Index (PPI), which measures what businesses are paying suppliers for goods. Data from the Bureau of Labor Statistics showed the PPI rose 0.6% from January to February, and was up 1.6% on an annual basis. Both figures were higher than economists were expecting.
Core PPI, which excludes volatile food and energy costs, was also higher than anticipated, rising 0.4% month-to-month and 2.8% year-over-year.
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.
Retail sales were also released earlier. While January's data showed retail sales fell by a wider-than-expected margin, Thursday morning's report indicated a rebound in February. Specifically, the Census Bureau said retail sales rose 0.6% from January to February, though this was below economists' estimates for an 0.8% gain.
Meanwhile, a report from the Labor Department showed that initial jobless claims unexpectedly fell last week, declining by 1,000 to 209,000.
"Scorching wholesale inflation data amidst this morning's lower-than-expected unemployment claims are sending market players back to the drawing board as they reevaluate the path of potential Fed rate cuts," says José Torres, senior economist at Interactive Brokers.
Indeed, according to CME Group's FedWatch Tool, futures traders are now pricing in a 54% chance the first quarter-point rate cut will come in June, down slightly from yesterday's 58%. Odds it will come in July are currently at 48%, up from 46% one day ago.
Microsoft adds $77 billion in market value on AI news
In single-stock news, Microsoft (MSFT) jumped 2.4%, adding $77 billion in market value, after the software giant said it will launch Copilot for Security on April 1. The generative AI (artificial intelligence) tool can help businesses respond to cybersecurity attacks and will boost Microsoft's top line with its "pay-as-you-go" pricing model.
"We expect a warm reception from customers to MSFT's usage-based pricing, as it will provide businesses a low-cost opportunity (initially) to pursue interesting cybersecurity use cases," says Mizuho Securities analyst Gregg Moskowitz, who has a Buy rating on the Dow Jones stock. "We also expect to see good monetization as efficiency and accuracy benefits become more apparent to users."
Robinhood pops as trading volume spikes
Robinhood Markets (HOOD) was another notable gainer, adding 5.2%. Last night, the online trading platform released its operating data for February, which showed that trading volumes were much higher year-over-year for stocks (+41%), options (+33%) and crypto (86%).
Also lifting the stock was a bullish note from Bernstein analyst Gautam Chhugani, who initiated coverage on HOOD with an Outperform (Buy) rating and a $30 price target – representing implied upside of 66% to current levels.
"The buy-side and sell-side, alike, refuse to see what we see – a monster of a crypto cycle over 2024-25," Chhugani says. "We expect crypto market cap to reach $7.5 trillion vs $2.6 trillion today," which should lead to impressive growth in Robinhood's crypto revenue, the analyst adds.
Still, the main indexes closed in negative territory as several large- and mega-cap semiconductor stocks sold off. Nvidia (NVDA), for one, fell 3.2%, while Advanced Micro Devices (AMD, -4.0%) and Intel (INTC, -X%) also declined.
As for the main indexes, the Nasdaq Composite fell 0.3% to 16,128, the S&P 500 dropped 0.3% to 5,150, and the Dow Jones Industrial Average shed 0.4% to 38,905.
Related content
- 50 Pi Day 2024 Deals — Pizza, Pies and More
- Get Your Starbucks BOGO This Thursday
- If You'd Put $1,000 Into Netflix Stock 20 Years Ago, Here's What You'd Have Today
-
The Most Tax-Friendly State for Retirement in 2025: Here It IsRetirement Tax How do you retire ‘tax-free’? This state doesn’t tax retirement income, has a low median property tax bill, and even offers savings on gas. Are you ready for a move?
-
Plan for Higher Health Care Costs in 2026: Projected Medicare Part B and Part D PremiumsIn 2026, Medicare participants will pay more for their health care. Part B costs are expected to rise more than 10%. Here's what you can do.
-
Avoid Medicare's 'Shadow Tax' With This Financial Expert's IRMAA-Busting TipsYou're cruising along in retirement, and then bam: Your Medicare premiums soar because your income crossed the limit. Take a breath. There could be a solution.
-
Grilling Season and ETFs: There's More Than One Way to Cook Up a PortfolioExchange-traded funds come in a multitude of 'flavors' these days, from passive to active to factor-based. Their flexibility is what makes them so delicious.
-
You Don't Want It, But You Should Plan for It Anyway: An Expert Guide to Long-Term CarePlanning for long-term care is crucial to protect your independence, family and financial stability against unexpected health events and rising care costs not covered by standard insurance.
-
Japan Tariffs: 5 Things That Might Get More Expensive for YouPresident Donald Trump's trade agreement with Japan features a 15% reciprocal tariff for all imported products, which could impact the prices of these items when you go shopping.
-
Five Questions to Help Ensure a Happy, Secure RetirementYou need to drill down to what you really want out of retirement. Then you can get down to the business of crafting a financial plan to make it happen.
-
I'm a Financial Adviser: This Is How You Can Save for Big Goals Even if You Feel Like You're Barely Getting ByLearning good financial habits — building an emergency fund, paying down debt, saving consistently — gives you flexibility, options and a path to security.
-
How to Buy an Annuity Online (Without Regret)You should never be rushed into buying an annuity. But now that they can be sold quickly and easily online, you need to be more alert than ever to pushy salesmanship. Here are four signs you're working online with a professional.
-
Dow Dives 542 Points on Soft Jobs Data: Stock Market TodayThe last day of a busy week ends with the first greater-than-1% move in either direction in more than a month.
