© Reuters.
Investing.com – Wall Street’s major indexes fell more than 2% on Friday as higher consumer spending and inflation in January raised concerns that the Federal Reserve will stick to its hawkish stance for longer.
The Price Index (PCE), the Fed’s preferred measure of inflation, rose 0.6% last month after rising 0.2% in December.
In the 12 months through January, the personal consumption expenditures index accelerated 5.4% after rising 5.3% in December.
Experts say this means the Fed is not finished, more pressure on yields to rise, the Fed has not won the fight against inflation yet, and stock market volatility will continue.
The Commerce Department said consumer spending, which accounts for more than two-thirds of US economic activity, jumped 1.8% last month. Economists polled by Reuters had expected growth of 1.3 percent.
The three major US indices are heading for weekly losses despite Thursday’s modest recovery.
After a strong January, stock markets fell this month as a slew of economic data fueled fears that the US central bank may have to keep interest rates higher for longer amid signs of flat inflation and a flexible labor market.
The following Fed forecast
Fed policy rate futures traders raised their bets on Friday, expecting the US central bank to raise interest rates at least three more times, after news of inflation accelerating in January..
Implied returns on Fed fund futures rose after the Commerce Department released data on the Personal Consumption Expenditure Price Index, the metric the Fed relies on to measure its 2% inflation target, rising 5.4% in January on a year-over-year basis, as inflation picked up. The core rate was faster than expected by 4.7%.
The Fed’s current target range for the interest rate is 4.5%-4.75%, and futures pricing indicates firm expectations that this rate will rise to a range of 5.25%-5.5% by June..
The most active US stocks today
Beyond Dead
Shares jumped 12% after Beyond Meat (NASDAQ:) reported a smaller-than-expected fourth-quarter loss, even as sales fell more than 20%. The meat alternatives company posted a loss per share of $1.05, lower than the expected $1.18, according to Refinitiv. It achieved revenues of $79.9 million, more than the expected $75.7 million.
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Shares of payments giant Block (NYSE: ) rose more than 6% in early morning trading after the company reported better-than-expected fourth-quarter revenue and strong gross profit growth.
Boeing
Shares of industrial giant Boeing (NYSE: ) fell more than 2% in premarket trading after the company said it was pausing deliveries of its 787 Dreamliners until it could run additional analysis on a fuselage component. Airplanes, which are often used on long-haul international routes, have suffered from several problems for several years.
EOG Resources
EOG Resources (NYSE: ) fell 3.6% after the energy company reported fourth-quarter earnings, excluding items, that fell short of analyst expectations, according to FactSet. But the company outperformed revenue.
Discovery Warner Brothers
The stock fell 4% after (NASDAQ:) reported disappointing results in its latest quarter. The media and entertainment group reported a loss of 86 cents per share on revenue of $11.01 billion. Analysts polled by Refinitiv called for a loss of 21 cents per share on revenue of $11.36 billion.
Lucid Motors shares
Electric vehicle company Lucid Motors (NASDAQ:) announced, on Wednesday, lower-than-expected fourth-quarter revenue from last year. Lucid recorded revenues in the fourth quarter of last year of $258 million, an increase of 876% year-on-year, and compared to expectations of $302.6 million.
Today, the stock is down 5%, to record $8.35.
