New York Stock Market Falls Awaiting US February CPI... Nvidia ↓

February CPI Released on the 12th... PPI to be Released on the 14th

The three major indices of the U.S. New York stock market are declining in early trading on the 11th (local time). Investors are adopting a cautious stance as they await the release of the February Consumer Price Index (CPI) on the 12th.

[Image source=Yonhap News]

As of 10:19 a.m. at the New York Stock Exchange (NYSE) on the day, the Dow Jones Industrial Average is trading at 38,531.34, down 0.49% from the previous trading day. The S&P 500, which focuses on large-cap stocks, is down 0.48% at 5,099.19, and the tech-heavy Nasdaq index is down 0.42% at 16,018.02.

By stock, Nvidia is down 1%. Following a sharp 5.55% drop on the previous trading day, February 8th, the decline has continued for two consecutive days. Super Micro Computer, a U.S. server manufacturer and an AI (artificial intelligence) beneficiary stock, is also down 8.81%.

Market attention is focused on the February CPI and Producer Price Index (PPI) to be released this week. These are the last major indicators before the March Federal Open Market Committee (FOMC) meeting scheduled for the 19th-20th of this month. The February employment report released on the 8th sent mixed signals, leading investors to gauge the Fed's future interest rate path through inflation data. According to the U.S. Department of Labor, nonfarm payrolls increased by 275,000 in February, exceeding the expert forecast of 198,000. However, the unemployment rate also rose to 3.9%, the highest since January 2022 (4.0%), surpassing the forecast of 3.7%, creating mixed directional signals.

The February CPI is expected to rise 0.4% month-over-month and 3.1% year-over-year. Compared to the January increase (0.3%, 3.1%), the monthly rise is expected to expand due to higher gasoline prices, while the annual increase is expected to remain at the same level. The core CPI, which excludes volatile food and energy prices, is expected to rise 0.3% month-over-month and 3.7% year-over-year. Both figures are expected to be lower than January's (0.4%, 3.9%). If the annual core CPI increase meets market expectations, it will be the lowest level in 2 years and 10 months since April 2021. However, it will still significantly exceed the Federal Reserve's target of 2%.

The February PPI inflation rate will be released on the 14th. It is expected to show a 0.3% increase month-over-month and a 1.1% increase year-over-year. Retail sales for February, also released on the same day, are expected to rise 0.8% month-over-month, reversing the 0.8% decline seen in January.

Mike Dickson, Chief of Research at Horizon Investments, said, "We do not expect the Fed to cut rates at the meeting at the end of this month," adding, "Given the recent rise in inflation, the Fed will maintain rates until core service inflation declines for at least three consecutive months." He further noted, "This means rates could be cut as early as June, or in late 2024 if sticky service inflation persists."

U.S. Treasury yields are moving sideways. The benchmark 10-year Treasury yield, a global bond yield benchmark, is slightly down at around 4.08%, while the 2-year Treasury yield, sensitive to monetary policy, is slightly up, trading at around 4.521%.

International oil prices are falling amid mixed factors of escalating geopolitical tensions in the Middle East and Russia and concerns over slowing demand in China. West Texas Intermediate (WTI) crude is down $0.34 to $77.67 per barrel, and Brent crude is down $0.31 to $81.77 per barrel.