Hot inflation reports stoked fears that Federal Reserve interest rate cuts may not arrive until later than anticipated this year. Stocks broke their five-week winning streak - the S&P 500 was down 0.42%, while the Dow Jones slipped 0.11% and the Nasdaq tumbled 1.34%. Investors should brace for more near-term volatility ahead.
Economic reports from last week came back mostly negative:
•Small Business Optimism - lower than expectation
•Inflation (Consumer) - higher than expectation
•Inflation (Producer) - higher than expectation
•Manufacturing (New York) - higher than expectation
•Manufacturing (Philadelphia) - higher than expectation
•Retail Sales - lower than expectation
•New Residential Construction - lower than expectation
•Consumer Sentiment - lower than expectation
•Jobless Claims - lower than expectation
In a holiday-shortened week, investors will look for guidance from economic reports like National Economic Activity, Housing and Jobless Claims.