Week of 03/11-03/15 Stock Market Retreats, Inflation Concerns

Market indexes trended lower this week, with tech stocks under pressure as inflation concerns loom ahead of the FED's policy meeting next week. Nvidia, which has been a major highlight in the last couple weeks, whipsawed throughout the week and finally settled close to the 900-point level on Friday. Apple, Microsoft, Amazon, and Alphabet shares all fell as tech valuations adjust to investors' sentiment. Oracle (ORCL) was a major earnings winner that provided a temporary boost to the market, but Adobe (ADBE) quickly turned that around on Friday with weaker-than-expected sales and poor guidance on their earnings call. Economic data was not favorable this week as the Producer Price Index (PPI) rose 0.6% and fueled investor uncertainty on the FED's actions for the next couple months. Expectations are set for the FED to begin cutting interest rates as soon as June, but with inflation sticking this can be hard to justify. Bitcoin pulled back on Friday, but had a record week reaching just above $73,000 as the halving rally continues.

How does the Producer Price Index (PPI) impact the stock market?

The Producer Price Index (PPI) has an impact on the stock market as it provides important insights into inflationary pressures at the producer level. The PPI measures the average change in prices received by domestic producers for their goods and services over time. An increase in the PPI suggests rising costs for producers, which can ultimately be passed on to consumers in the form of higher prices. This can lead to concerns about inflation and its potential impact on corporate profits and consumer spending, causing market volatility. Investors closely monitor the PPI as it serves as an indicator of potential future trends in consumer prices and can influence their investment decisions in various sectors or industries. Furthermore, the PPI data is often used in conjunction with other economic indicators to assess the overall health of the economy, which in turn affects market performance.