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.
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.
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
-
Choose a Beneficiary for Your Estate Plan: It's Not 'Duck, Duck, Goose'Choosing a beneficiary for your 401(k), insurance policy or similar assets is crucial for estate planning. Here is how to do it, and six pitfalls to avoid.
-
T-Mobile's Free iPhone 17 Deal: A Smart Switch or a Hidden Catch?Receive a free iPhone 17 when you switch to T-Mobile. We'll explain whether the deal is worth it.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client ReviewsFinancial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop InvestmentsTruck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
How Digital Platforms Are Changing the Way You Invest in GoldInvesting in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
This Is How Life Insurance Can Fund Your Dreams NowBeyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
-
Potential Trouble for Retirees: A Wealth Adviser's Guide to the OBBB's Impact on RetirementWhile some provisions might help, others could push you into a higher tax bracket and raise your costs. Be strategic about Roth conversions, charitable donations, estate tax plans and health care expenditures.
