S&P 500, Dow flat after inflation data; Intel's bleak forecast weighs
inflation print signaling continued moderation in price pressures helped offset an earnings gloom cast by a dour revenue forecast from Intel.
The U.S. Commerce Department's report showed the personal consumption expenditure index — the Federal Reserve's preferred inflation gauge -rose moderately in December
, keeping the annual increase in inflation below 3% for a third-straight month that could allow the central bank to start interest rate cuts this year.
«Today's report, is clearly market friendly even if it doesn't suggest, at this point, that the Fed lowers rates at the March 20 meeting,» said Quincy Krosby, chief global strategist at LPL Financial.
«Unless next month's collection of inflation-related data underscores decisively that the path towards to 2% is squarely in sight, the Fed will most likely wait until May or June to begin easing rates.»
Weighing on the tech-focused Nasdaq, Intel slumped 12.1% to a six-week low after forecasting that its first-quarter revenue could miss estimates by over $2 billion, driving losses between 1.6% and 2.2% in other chip stocks including Advanced Micro Devices, Qualcomm and Micron Technology.
The Philadelphia SE Semiconductor index slipped 2.4%, while the S&P 500 technology sector was the only one in the red with a 0.7% loss.
This, along with Tesla's growth warning on Wednesday, likely deepened worries over rich valuations of heavily weighted megacap companies.
