The Dow Jones Industrial Average was off to a shaky start to the second quarter, with traders weaving through a web of United States inflation data fearing that the market rally could decelerate.
The Dow pulled back by 264 points, or 0.7% on Monday, whereas the S&P 500 lessened by 0.3%. The tech-dominant Nasdaq Composite registered a fractional increment of less than 0.1%. This hesitancy amongst investors stems from concerns about the Federal Reserve’s rate-reduction timeline this year and apprehensions regarding when central bankers would hit their 2% inflation mark. Jerome Powell, Federal Reserve Chair, argued on Friday that the economy retains its vigor and inflation goes beyond the target.
Referring to this state of affairs, Powell told public radio’s “Marketplace” program, “that means we don’t need to rush to cut. The economy is robust at present, and the labor market is potent. Plus, inflation is declining. We will exercise caution in making this decision because we can do so.”
A gradual but steady incline was witnessed in Treasury yields on Monday, as investors weighed Powell’s remarks and crucial inflation data. The primary 10-year Treasury yield spiked by over 11 basis points, elevating to 4.303%.
Investors responded to the personal consumption expenditures price index, which released during the market’s closure for Good Friday. Core PCE, leaving out food and energy, reflected a 2.8% inflation rise on a 12-month basis in February, consistent with anticipations. On a monthly basis, the metric increased by 0.3% compared to the preceding month, reported the Commerce Department.
On another front, UPS will strengthen its relationship with the United States Postal Service by becoming the chief air cargo provider. This agreement, poised to significantly expand the ongoing collaboration between the parties involved, will allow UPS to handle the majority of the air cargo in the U.S for USPS, post a transitional period. Thus, impacting the market further.
Information Box:
-The Dow Jones Industrial Average slid 264 points, stirring markets into the second quarter.
-The Federal Reserve will likely slow down their rate-cutting timeline due to inflation hovering above the 2% target.
-Traders reacted to the newly released personal consumption expenditures price index.
-The Dow Jones moves closer to hitting the 40,000 mark.
-UPS secures a significant air cargo contract with the United States Postal Service, expanding their partnership further.
Reference 1: CNBC, Dow slips to kick off the second quarter
Reference 2: Yahoo Finance, Dow nears 40,000 as second quarter kicks off
Reference 3: Associated Press, UPS to become the primary air cargo provider for USPS
WordPress Excerpt: Dow Jones begins the second quarter on shaky grounds amidst inflation fears and UPS secures a significant air carrier contract with USPS.