Stocks experienced a downturn on Thursday amidst growing concerns that the uncertain trajectory of inflation could delay potential interest rate cuts, casting a shadow over the market sentiment.
The Dow Jones Industrial Average (^DJI) declined by approximately 0.7%, accompanied by a 0.4% drop in the S&P 500 (^GSPC) and a 0.2% slip in the tech-heavy Nasdaq Composite (^IXIC).
Midday surges in the market were swiftly reversed following comments from Minnesota Fed President Neel Kashkari, who hinted at the possibility that the Fed might refrain from implementing interest rate cuts for the remainder of the year if inflationary progress stalls. Additionally, the market’s positive momentum was tempered by a surge in oil prices.
Oil futures surged by over 1% amid escalating tensions in the Middle East, with West Texas Intermediate (CL=F) settling at $86.59 per barrel and Brent (BZ=F), the international benchmark, closing at $90.65 per barrel, marking their highest levels since October.
Earlier, despite a rocky start to the second quarter, the market had shown resilience after Chair Jerome Powell reassured investors that the Federal Reserve remained committed to potential rate cuts.
Investor attention remains focused on the labor market, with anticipation building for the March jobs report scheduled for release on Friday. This report is considered a pivotal economic indicator for the Fed’s data-driven policy decisions. Although experts generally anticipate the maintenance of a robust US labor market, recent Department of Labor data revealed a slight uptick in initial jobless claims, rising by 9,000 to 221,000, reaching their highest level since January.
In corporate news, Levi Strauss (LEVI) witnessed a 14% surge in shares after the denim manufacturer raised its full-year earnings projections. Meanwhile, BlackBerry’s (BB) US-listed stocks experienced a notable increase as the Canadian company’s cybersecurity division contributed to an unexpected quarterly profit.