Wall St dips as traders assess hot inflation data; chip stocks weigh
By Bansari Mayur Kamdar and Shashwat Chauhan
(Reuters) — Wall Street's main indexes slipped on Thursday after hotter-than-expected producer prices data likely muddied bets around the timing of the Federal Reserve's first rate cut and high-flying chip stocks extended their losses.
Most megacap growth and technology stocks inched higher, but artificial intelligence (AI) giant Nvidia (NASDAQ:NVDA) fell 3.6%.
Chipmakers such as Intel (NASDAQ:INTC) and Advanced Micro Devices (NASDAQ:AMD) fell more than 1% each, while the Philadelphia SE Semiconductor Index shed 1.6%.
Eight of the 11 major S&P 500 sectors fell, with rate-sensitive real estate leading losses, down by 2%.
The Russell 2000, tracking small-cap stocks, fell 1.8%, underperforming its Wall Street peers.
A Labor Department report showed the Producer Price Index (PPI) rose 0.6% month-on-month in February, compared with a 0.3% increase expected by economists polled by Reuters, amid a surge in the cost of goods like gasoline and food.
It rose 1.6% in the 12 months to February, versus an estimated growth of 1.1%.
U.S. retail sales rebounded in February, rising 0.6% last month, but below expectations of a 0.8% advance.
«In a way, today was the past month in microcosm — sticky inflation, combined with signs of softness elsewhere in the economy,» said Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley.
«Retail sales may have come in below estimates, but the PPI was even more of an upside surprise than Tuesday's CPI.»
Traders now see a 62% chance of the Fed cutting rates in June, according to the CME FedWatch tool, down from 67% before the data.
Meanwhile, the number of Americans filing for unemployment claims stood at 209,000 for the
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