Stocks sink as inflation fears rise
Stocks sank after a hotter-than-expected Producer Price Index reading as well as a higher inflation forecast from the Fed amid rising energy prices.
The S&P 500, Nasdaq 100, and Russell 2000 all sank as traders were rattled by geopolitical concerns and inflation fears, as February’s Producer Price Index came in well above estimates.
The Federal Reserve held its policy rate unchanged at a range of 3.5% to 3.75%, as was universally expected.
Fed officials upped their forecast for growth this year and the next relative to December and raised their forecasts for inflation (particularly headline inflation, which includes energy prices) in 2026. Stronger growth and inflation would generally indicate a reduced need for rate cuts, but the median rate path through 2028 was unchanged from December.
All sectors ended the day in the red.
Cryptocurrencies generally traded lower after the SEC and CFTC issued new guidance on how securities laws apply to crypto assets.
Stocks that moved higher:
Constellation Energy, Talen Energy, and NRG surged as BNP analysts see a “golden (AI)ge” ahead for them.
Optics stocks Applied Optoelectronics, Lumentum, and Coherent soared as as executives signaled more AI-related demand.
Macy’s jumped after reporting that adjusted earnings per share beat estimates by 8%.
Chinese tech giant Baidu ticked higher after hiking AI prices.
DocuSign rose after its Q4 revenue and EPS beat expectations and it announced a $2 billion increase in its share buyback program.
Stocks that moved lower:
Gemini Space Station sank after the stock was cut to “sell” from “neutral” by Citi, which lowered its price target to $5.50 from $13 amid a less optimistic outlook for bitcoin.
Strategy also dropped as its price target was lowered to $260 from $325 by Citi.
Oklo fell after reporting a wider-than-expected full-year loss per share after the bell yesterday.
Rocket Lab dropped after announcing an at-the-market offering to sell up to $1 billion of equity.
SailPoint sank after its 2027 revenue forecast missed estimates.
Unilever fell following a report that the consumer goods company is looking to spin off its remaining food brands.
