Markets closed mixed on Wednesday, with the Dow Jones Industrial Average (DJIA) inching up on strength in some of its components and the S&P 500 (SPX) declining from its 17th record high this year reached a day earlier. The tech benchmarks Nasdaq Composite (NDAQ) and Nasdaq-100 (NDX) declined as investors took profits in chipmakers and other tech stocks. Market participants are awaiting the data on producer prices, which will provide further clues regarding inflation trends and the subsequent Federal Reserve’s interest-rate decisions.
Macro News in Focus
Tuesday’s inflation reports reflected a still-sticky inflation, with numbers coming in above the expectations for both the headline and the core CPI (which excludes volatile food and energy prices). Today’s PPI report is expected to offer further insight into the inflation picture, while the retail sales data will shed some light on the state of U.S. consumption.
The Fed is widely expected to leave rates unchanged at its meeting next week. However, traders see a 61% chance of the first rate cut coming in June, according to CME Group’s FedWatch Tool. Still, the wagers on June’s rate cut have come down from a little above 85%, seen after an increase in the unemployment rates that were reported last week.
Notable Stock News
Oracle (ORCL) surged almost 12% after posting higher-than-expected overall earnings and revealing robust demand for its cloud offerings, with notable tailwinds coming from AI infrastructure demand. Management said the company closed a big cloud infrastructure contract with Nvidia (NVDA) and hinted that an important joint announcement is coming at Nvidia’s global GTC developer conference next week.
Tesla (TSLA) continued its downward trend, bringing its year-to-date decline to over 31%. The stock fell yesterday after Wells Fargo cut its recommendation to “Sell” from “Hold” and reduced its price target, saying it doesn’t expect earnings growth to rebound soon.
Dollar Tree (DLTR) also posted a notable fall, tumbling over 14% after the company reported revenue and earnings below analysts’ estimates and announced plans to close hundreds of stores. Weak first-quarter and full-year guidance added to investor disappointment.
