XLU - Stocks Mixed While Dollar Treasury Yields Surge After CPI Data: What's Driving Markets Thursday? | Benzinga
Wall Street had a mixed morning session as investors carefully assessed the implications of another strong inflation report, pondering how it might influence future decisions by the Federal Reserve regarding interest rates.
In September, the Consumer Price Index (CPI) surged by 3.7% year-on-year, exceeding the anticipated 3.6%, while core inflation moderated to 4.1% year-on-year, in line with earlier forecasts. On Wednesday, the producer inflation report also saw a higher-than-expected print, and last week the jobs market report revealed much stronger-than-predicted employment growth.
With the Federal Reserve’s meeting scheduled in less than two weeks, investors appear to be firmly leaning toward the expectation that the Fed will hold interest rates steady, with Fed futures pricing indicating an almost 90% likelihood of this outcome.
Bond yields moved higher by about 10 basis points across the Treasury curve, with the policy-sensitive two-year yield jumping above 5% again.
The U.S. dollar was the major beneficiary of the higher-than-expected headline CPI number, with the Dollar Index (DXY) up 0.6%, on track to snap a six-day losing streak.
Cues From Thursday’s Trading:
The S&P 500 Index edged 0.1% up, while the Dow Jones Industrial Average held steady.
Tech stocks outperformed, with the Nasdaq 100 grinding 0.5% higher, while small caps were the heaviest hit, with the Russell 2000 down 1.4%.
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