US stocks pause as key inflation data eyed
economictimes.indiatimes.cominflation and other economic data that could shed light on the possible timing of a Federal Reserve interest rate cut.
As corporate earnings season winds down, investors refocused on economic data and the likely path of U.S. rates. Equities have been on a furious rally for weeks, fueled largely by enthusiasm about artificial intelligence-related stocks that lifted the S&P 500 and Dow Jones industrials to record levels while leaving the Nasdaq just short of a new high.
With the latest employment report not due until next week, the spotlight is on Thursday's January personal consumption expenditures price index (PCE), the Fed's preferred inflation gauge.
Should the PCE reading resemble recent inflation readings on consumer and producer prices, it could compel the Fed to hold rates at current levels longer than the market is anticipating.
On Monday, Kansas City Federal Reserve Bank President Jeffrey Schmid used a debut speech
on policy to signal that he remains focused on the threat of high inflation and is in no rush to cut rates.
In addition, Fed Governor Michelle Bowman on Tuesday indicated she is in no hurryto cut rates, given upside risks to inflation that could stall progress or even cause price pressures to resurge.
«It's been toppy, it feels like it is clearly a little bit stretched,» said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.
«The market is getting at least attuned to the fact they are not going to get what they want and so it is backing up.… You're going to see
