Stocks are in the red Thursday even as they flirt with new all-time highs. Why are stocks down today?
Well, it seems investors are responding to a slightly hotter than expected Consumer Price Index (CPI) report. Prices rose 0.3% in December, reflecting an annual rate of 3.4%. That came in above estimates of 0.2% and 3.2%, respectively.
While prices were only slightly above expectations, this has only reinforced the notion that the Federal Reserve is unlikely to lower rates in the first half of the year.
“These are not bad numbers, but they do show that disinflation progress is still slow and unlikely to be a straight line down to 2%,” said Seema Shah, Chief Global Strategist at Principal Asset Management. “Certainly, as long as shelter inflation remains stubbornly elevated, the Fed will keep pushing back at the idea of imminent rate cuts.”
That said, futures traders continue to price in a roughly 69% chance of a March cut, an even higher chance than what was estimated prior to the CPI release.
Why Are Stocks Down Today?
The S&P 500 was down about 0.1% heading to the bell today, while the Nasdaq Composite sat roughly at parity. However, the S&P also briefly touched a new all-time high in the morning. Indeed, the index notched a high of $4,798 today, just edging out Wednesday’s high of $4,790.
Either way, stocks are still trending around their highest level ever, above their previous December 2021 peak.
Stocks aren’t alone in the red, either. Indeed, cryptocurrencies are also down today, including, surprisingly, Bitcoin (BTC-USD). BTC is down 0.7% as of this writing, even despite promising news related to the flagship crypto. Today marked the first day of trade for 11 spot Bitcoin exchange-traded funds (ETFs), following approval from the U.S. Securities and Exchange Commission (SEC).
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
