Investing.com– U.S. stocks edged lower Friday, with hotter-than-expected inflation readings putting markets on edge before a Federal Reserve meeting next week.
At 09:35 ET (13:35 GMT), S&P 500 index fell 25 points, or 0.5%, NASDAQ Composite dropped 102 points, or 0.6% and Dow Jones Industrial Average dropped 50 points, or 0.1%.
Sticky inflation readings put rate fears back in play
Data released earlier Friday showed that U.S. import prices rose 0.3% last month after an unrevised 0.8% jump in January, largely in line with expectations. In the 12 months through February, import prices dropped 0.8% after declining 1.3% in January.
Government data this week showed both consumer and producer prices increased strongly for the second consecutive month in February, ramping up concerns that the Federal Reserve will need to keep rates higher for longer to bring down inflation.
While the Fed is not expected to raise interest rates further, markets were seen cutting the potential for an interest rate cut in June, after the hot inflation data.
Traders have reined in bets of a June rate cut by the Fed to 60% from 73% last week, according to the CME FedWatch Tool.
The Fed is widely expected to keep interest rates unchanged next week, and the central bank’s dot plot at the conclusion of its policy meeting next Wednesday is now crucial for guessing just how cautious the officials will be.
Adobe sinks on weak guidance
Adobe Systems (NASDAQ:ADBE) slid 12% after issuing weaker-than-expected second quarter revenue guidance on higher competition and weak demand for its AI offerings.
Ulta Beauty (NASDAQ:ULTA) dropped 7.8% after the chain of beauty stores forecast full-year profit below Wall Street estimates as elevated supply-chain costs and increased promotions hurt its margins.
Hibbett Sports (NASDAQ:HIBB) stock fell 5.4% after the athletic apparel and footwear retailer missed analysts’ expectations for its fourth quarter, and offered up lackluster future guidance.
Crypto stocks such as MicroStrategy Incorporated (NASDAQ:MSTR), Marathon Digital (NASDAQ:MARA) and Coinbase Global (NASDAQ:COIN) all retreated after Bitcoin fell sharply from recent record highs.
Oil set to record weekly gains
Oil prices edged lower Friday, but were on course to record gains of around 4% this week after a bullish IEA report and a bigger-than-expected draw in U.S. inventories, suggesting improving demand in the world’s largest fuel consumer.
By 09:35 ET, the U.S. crude futures traded 0.5% lower at $80.85 a barrel, while the Brent contract dropped 0.6% to $84.94 per barrel, with both contracts falling back from four-month highs.
The International Energy Agency on Thursday raised its view on 2024 oil demand for a fourth time since November, saying world oil demand will rise by 1.3 million barrels a day this year, up 110,000 barrels a day from last month.
Both contracts had soared earlier this week, to their highest levels since late-November, after an unexpected draw in U.S. oil and gasoline inventories indicated that demand in the world’s largest fuel consumer was picking up.
(Ambar Warrick contributed to this article.)
