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Stock market today: Dow slumps as Fed members say larger hikes not off table

Published 02/16/2023, 03:21 PM
Updated 02/16/2023, 04:12 PM
© Reuters.

© Reuters.

By Yasin Ebrahim  

Investing.com -- The Dow closed lower Thursday as data pointing to underlying inflation pressures and a tight labor market stoked further fears about the Federal Reserve’s rate hike path at a time when some Fed members say a move back to bigger hikes isn't off the table. 

The S&P 500 fell 1.4%, the Dow Jones Industrial Average fell 1.3%, or 431 points, and the Nasdaq was down 1.8%.

The PPI rose 0.7% in January, topping economists' forecasts for a 0.4% increase, taking the year-over-year figure to 6.0% in January, ahead of the 5.4% expected.

The largest monthly PPI increase since June arrived just as initial jobless claims unexpectedly fell, pointing to a tight labor market and suggesting the Fed still has more work to do to bring down demand.

“Data releases like this are why policymakers continue to reiterate their intention to raise rates higher before pausing, and then leaving rates in a restrictive territory for quite a while,” Jefferies said in a note.

Following the data, Federal Reserve Bank of St. Louis President James Bullard said the prospect of the Fed reverting to larger hikes isn't off the table.

“I wouldn't rule anything out for that meeting or any meeting in the future,” Bullard said Thursday following a presentation to the Greater Jackson Chamber in Jackson, Tennessee, referring to the prospect of a 50 basis point hike in March. 

Treasury yields jumped on the remarks, sending growth sectors of the market lower including consumer discretionary and tech which were the worst hit.

Tesla (NASDAQ:TSLA) gave up gains to trade more than 5% lower after the electric vehicle maker recalled 362,000 EVs, equipped with its “Full Self Driving” software, which may cause vehicles “to act unsafe around intersections,” according to the National Highway Traffic Safety Administration.

News of the recall offset earlier positive news that Tesla had sold out its Model Y EVs in the U.S. for this quarter as recent price cuts spurred demand.

On the earnings front, Roku (NASDAQ:ROKU) was a standout performer, rising more than 11% after the streaming device marker reported upbeat guidance and a narrower-than-expected loss in the fourth quarter.

"Once macroeconomic trends improve, Roku is poised to return to meaningful profitability as a platform and FAST channel leader,” Wedbush said after lifting its price target on the stock to $80 from $75.

Twilio (NYSE:TWLO) was also a big winner, up 14%, after the communications company delivered strong guidance and fourth-quarter revenue that topped Wall Street estimates.

Cisco Systems Inc (NASDAQ:CSCO) reported better-than-expected second-quarter results as improving supply and strong demand bolstered performance. Its shares rose more than 5%.

“While we expect investors to focus on the dynamic between backlog and order growth, we believe the company is well-positioned as it focuses on higher growth,” Oppenheimer said as it lifted its price target on the company to $58.00 from $50.00.

In other news, Virgin Galactic Holdings (NYSE:SPCE) was down 0.6% after its VMS Eve suborbital spacecraft, previously referred to as WhiteKnightTwo, completed a test flight after more than 15 months out of action.

Latest comments

Bullard its not guy for economy he is bad person and he dont know what is good , he is like childe 5 years old dont know anythig, and people bcs of him loosing money  he is looser
US 500 must hit 3750 by now
Americans are in for a rude awakening
Having the people woke instead of sleepy is good.
Zzzzzzz. Permanent Anti-American sentiment with dire predictions that never materialize. Shouldn't you be in the front lines somewhere?
Hahahaha,market is fallen in such a way that it ll never grow again and it ll wipe out day by day till next further rate hike.Guys it's all manipulation of market.
By next week everyone will start buying again as stocks manipulater will twist and turn bad news to good news.....
Powell should have hiked 0.75% in December and 0.5% in January. He was late and now he messed it up again.
100% agreed
Consumer spending is a runaway diesel.  The FED can't stop it, and it's going to blow to pieces in the not too distant future, taking with it the criminally inflated US Ponzi Scheme.
Spot on. Spot freaking on!!!!
The problem is, is people under 40 credit card means that they actually have money. Unless you have 10 X, the amount of cash compared to your credit limit you have no business owning a credit card. So 5000 limit. Ya must havw 50k in cash. If not. You shouldnt have a card!
Ya, let's keep hiking rates on one trillion in credit card debt while pushing job loss. Great plan!
The Feds goal is to not upset the apple cart, politically or economically. Remember, Powell is a Democrat. In a word- stagflation at the worst.
  You also said "Powell is a Democrat".  And "Obama appointed Powell to the Fed Board of Governors first" is immaterial to that, esp. since Obama had more Republicans in his admin than Trump had Democrats in his admin.
 ... and esp. since Powell worked for/with Republican Pennsylvania Senator Richard Schweiker & George H. W. Bush decades before he worked for Obama.
erikke well, he also he spent a year as a legislative assistant to rep. Richard Schweiker, and I heard a rumor he delivered newspapers as a kid.. but that's not what we're talking about, is it?
Yep, that no landing is still in sight.
Hard nose dive belly landing into a depression is in sight
0.7% monthly inflation means double-digit annual. Also, the government mostly concentrates on fudging consumer inflation numbers, reporting them lower than they really are. This makes PPI more reliable indicator.
 The irony of Warm complaining about fudging numbers & reliability, when he can't do basic math.
lol inflation rate is also compounded whatya saying. It’s month over month, not this month over starting month of the year. Everyone seems weak at math except that compounding formula is correct.
Thank you for the clarification. First Last provided a correct compounding formula, that applies to a constant rate each month, but it is not applicable for extrapolating an annual rate of inflation from a monthly rate. And looking at the past 12 month's of historical monthly rates, I admit, neither was my suggestion of adding each.
actually you're right I recover mine too
with zero payments all your money will be refunded back to you in one peace
Bloomberg or Reuters or any other analyst can challenge for next moves of any stock for next 6 month....even these analyst will be proven stupid......any guys from any of research analysts can take challenge and win????? All guys here are paid to produce nonsense news 8 out of 10 times
What kind of news are they paid to produce the other 2 out of 10 times?
What about yesterday's good results then?????? Just you some of shameless guys keep posting such news to trap ...
Biden caused it all.
yep..the inflation he gave us is hurting the poor and middle class.
Get behind me Satan were Jesus words to Peter Mark 8:33 after a disagreement. Is not all rosy.
2 year old data. zelenski raided his opposition candidate and seized his assets..
And boinked his wife and sank his boat too, we hear.
 2022 is NOT 2 years ago.
6% is still too hot. They'll need some rate hikes more, either 2x0,25 or 1x0,50 doesn't matter much.
How about publishing this article real time?
Right? It's all end of day.
How do you publish an article about the DAY before the day is over?
think faster type harder
frigging idiot. Interest rate hike won't be able to solve this inflation.
Ah yes, you can see the desperation in the headlines.  Now we've reverted to the laughable "lost less than expected" comedy.  The jokes continue to flow in the US Ponzi Scheme.
I'm afraid that you always see what you want to see Mitch.
These same idiots that comment on you were agreeing that inflation was transitory a year ago but they cant remember it
These same goodballs that are commenting negatively toward you also thought inflastion was transitory. They must be bots.
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