Stocks Hold Gains As Traders Opt To Challenge Fed On Hot Inflation Data; Bonds, Gold Fall: 10 ETFs Moving Tuesday

Author: Piero Cingari | March 12, 2024 10:38am

An inflation report showing higher-than-anticipated figures in February 2024, following a similarly hot January report, failed to unsettle investors on Tuesday morning trading.

The consumer price index (CPI) for February rose by 3.2% compared to the previous year, slightly exceeding both prior and anticipated rates of 3.1%. Monthly data aligned with expectations, showing a 0.4% increase.

However, the core CPI index, which excludes volatile components such as energy and food items, surpassed expectations by registering a 3.8% annual increase, compared to the anticipated 3.7% predicted by economists.

Despite these developments, market expectations for a rate cut in June remained largely unchanged, with a 70% probability. Traders remained attentive to the possibility of four potential rate cuts by the year’s end.

Following the opening bells, immediate responses indicate a steady positive sentiment in risky assets, as major U.S. indices kept premarket gains.

Tuesday’s ETF Movers Following CPI Report

• Bonds fall: Treasury yields moved higher after the higher-than-expected CPI report. The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT), reflecting the performance of longer-dated Treasury securities, fell 0.7% at 10:00 a.m. in New York, on track for the fourth straight days of losses.
• Precious metal falls: Rate-sensitive commodities such as gold and silver fell. The SPDR Gold Trust (NYSE:GLD) fell 0.9%, on track to snap a nine-day winning streak.
• Stocks keep premarket gains: The SPDR S&P 500 ETF Trust (NYSE:SPY) traded 0.3% higher for the session, erasing premarket gains. The top-performing stock within the S&P 500 was Oracle Corp. (NASDAQ:ORCL), up 11%, while Southwest Airlines Co. (NYSE:LUV) was the main laggard, down 13%. The tech-heavy Invesco QQQ Trust (NASDAQ:QQQ) was 0.4% higher.
• Among sectors, the Consumer Staples Select Sector SPDR Fund (NYSE:XLP) outperformed, up 0.4%. The Utilities Select Sector SPDR Fund (NYSE:XLU) fell 0.4%, lagging behind.
• Industry-wise, the worst performers were the U.S. Global Jets ETF (NYSE:JETS), the Invesco Solar ETF (NYSE:TAN) and the VanEck Gold Miners ETF (NYSE:GDX), down 3.2%, 2.9% and 2.1%, respectively.
• Semiconductors, as tracked by the VanEck Semiconductor ETF (NASDAQ:SMH), rose 0.9%, attempting to rebound following Monday’s 1.7% decline. Among chipmakers, Taiwan Semiconductor Manufacturing Company (NYSE:TSMC) rose 3%, followed by Nvidia Corp. (NASDAQ:NVDA) up 2.7%.

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Posted In: GDX GLD JETS LUV NVDA ORCL QQQ SMH SPY TAN TLT TSMC XLP XLU