NEW YORK: Wall Street’s main indexes were mixed on Friday as investors digested hot inflation data that caused a sharp selloff in the previous session on fears about quicker interest rate hikes.
Eight of the 11 major S&P 500 indexes advanced, with energy stocks rising 1.8%, helped by an uptick in crude prices after the International Energy Agency (IEA) said oil markets were tight.
Banks also rose 0.9%, but technology and consumer discretionary indexes, which include some high-growth names including Amazon and Microsoft , slipped.
The S&P 500 and the Dow fell more than 1% on Thursday, while the tech-heavy Nasdaq slumped 2% after data showed consumer prices surged 7.5% in January, marking the biggest annual increase in 40 years.
Further, St. Louis Fed Bank President James Bullard, a voter on the Fed’s rate-setting committee this year, told Bloomberg News on Thursday he wants a full percentage point of rate hikes over the next three policy meetings.
“We’ve got some element of calm coming into the market, that’s the digestion of the news,” said Seeema Shah, chief strategist at Principal Global Investors.
“The Fed doesn’t want to send an alarm signal, they want to look like they have a stable grip on the situation, and not send everyone running around.”
The inflation data and subsequent comments from Bullard drove investors to ramp up bets of rate hikes this year.
Traders are pricing in a big half-point rate hike in March with just a scant chance of a smaller quarter-point hike, and heavy bets for a policy path that would bring rates to a range of 1.75%-2.00% by the end of the year.
Meanwhile, a University of Michigan survey showed US consumer sentiment fell to its lowest level in more than a decade in early February amid expectations that inflation would continue to rise in the near term.
The CBOE volatility index, Wall Street’s fear gauge, moved up for a second session, after hitting its lowest level since mid-January on Wednesday.
At 10:30 a.m. ET, the Dow Jones Industrial Average was up 144.18 points, or 0.41%, at 35,385.77, the S&P 500 was up 6.16 points, or 0.14%, at 4,510.24, and the Nasdaq Composite was down 15.16 points, or 0.11%, at 14,170.49.
Despite the recent bout of volatility in markets, the three major indexes are on track for weekly gains, helped by strong earnings, reduction in COVID-19 cases and lifting of mask mandates in some states.
Visa and Mastercard rose 0.7% and 0.6% respectively after UBS raised its price target on the stocks.
Online real-estate platform Zillow Group Inc jumped 15.9% after beating Wall Street estimates for quarterly sales, boosted by an 11-fold increase in revenue in its homes segment.
Under Armour Inc slumped 9.5% after warning that its profit margin would be under pressure in the current quarter.
Advancing issues outnumbered decliners by a 2.22-to-1 ratio on the NYSE and a 2.02-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs.