Nasdaq 100: Treasury Yields Soar, Pressuring US Shares—Tesla and Gilead Defy the Pattern…

How Did Inflation Information Affect the Market?

The buyer value index (CPI) rose zero.5% in January, exceeding economist expectations of zero.three%. 12 months-over-year inflation now stands at three%, whereas core CPI, which excludes meals and power, rose three.three%. This report complicates the Fed’s outlook, as officers have careworn they want “better confidence” that inflation is cooling earlier than contemplating price cuts.

Following the info launch, merchants lowered their expectations for a number of price cuts in 2024. Market pricing now suggests only one 25-basis-point lower this yr, in comparison with earlier estimates of two. The 10-year Treasury yield spiked to four.65%, its highest degree in over two weeks, reflecting fears that charges will stay larger for longer.

Which Sectors Are Feeling the Stress?

All 11 S&P 500 sectors have been within the purple, with actual property main losses, down 1.four%. The sector, which is extremely delicate to rates of interest, was hit laborious as Treasury yields climbed. Utilities additionally declined zero.7%, whereas power shares dropped 1.5% as crude oil costs fell.

Financials and client discretionary shares additionally struggled, with banks dealing with the prospect of a protracted interval of excessive rates of interest that would gradual lending demand. Development shares, notably within the tech sector, additionally noticed weak point, as the price of capital stays elevated.

Which Shares Are Standing Out?