US stocks saw a decline on Thursday. This was due to losses in chip companies for another day and a rise in producer prices in the US.
This situation made investors question whether the Federal Reserve might postpone cutting interest rates.
In February, the cost of goods, including gasoline and food, pushed producer prices up unexpectedly.
Interest-sensitive sectors like utilities and real estate suffered the most, dropping by 0.8% and 1.6%.
Investors now think the Fed might not reduce borrowing costs at its next meeting. According to the FedWatch tool by CME, the likelihood of a rate cut in June has fallen.
Experts noted that the Fed’s policy might not relax as much as hoped this year. However, the risk of tightening policy further seems low.
Nvidia shares decreased by 3.2%, and the Philadelphia semiconductor index fell by 1.8%. The index’s weekly loss stands at 3.5%, following a period of notable gains.
The Dow Jones lost 0.35%, closing at 38,905.66 points—the S&P 500 and the Nasdaq technology index both experienced declines.
Despite this, the S&P 500 has gained about 8% since the start of the year.
Additionally, US retail sales increased by 0.6% in February. This was below the 0.8% growth that was expected.
These developments are significant as they highlight concerns over inflation and interest rates.
They also reflect the performance of key sectors and the overall economy’s health, which are crucial for investors and policymakers alike.