Stocks fell sharply on Friday after a closely watched inflation gauge for the Federal Reserve came in hotter-than-expected last month. The Dow Jones Industrial Average fell over 300 points, while the S&P 500 Index and Nasdaq Composite lost 1% and 1.7%, respectively.
Here's how the market settled on Friday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
That negativity led all major averages to end the week with their biggest losses so far this year. The S&P 500 fell 2.7%, while the Dow lost almost 3% for its fourth straight weekly loss. The Nasdaq ended the week 3.3% lower, marking its second negative week in three.
Driving Friday's downturn, the Personal Consumption Expenditures (PCE) price index rose 0.6% in January on a monthly basis and 5.4% year-over-year, the Commerce Department reported Friday. Stripping out more volatile food and energy prices, Core PCE also rose 0.6% for the month and 4.7% from last year.
Consumer spending also rose more than expected despite the price increases, rising 1.8% for the month or 1.1% when adjusted for inflation. Personal income when adjusted for inflation also came in stronger-than-expected at 1.4%, while the personal savings rate increased by 4.7%.
The report suggests that inflation continued at the start of the year despite the central bank's aggressive rate hikes throughout much of 2022, meaning the Fed will likely maintain its hawkish stance. The central bank has raised benchmark rates by 4.5 percentage points since March 2022.
In other economic news, consumer sentiment rose slightly more-than-expected at 67 for February, according to the University of Michigan's survey. "After lifting for the third consecutive month, sentiment is now 17 index points above the all-time low from June 2022 but remains almost 20 points below its historical average," said Joanna Hsu, director of Surveys of Consumers, in a statement.
"Consumers with larger stock holdings exhibited particularly large increases in sentiment. Overall, February's reading was supported by a 12% improvement in the short-run economic outlook, while all other index components were essentially unchanged," Hsu added.
On the earnings front, Block
"We believe persistently high inflation, the slowing economy, increased competition and trading-down behavior by consumers among proteins are all negatively impacting growth for our category and our brand, but we do believe this is transitory," CFO Lubi Kutua said during the company's earnings call on Thursday.
In other stock news, Boeing
Looking ahead, market participants are in for more economic data on the health of U.S. manufacturing and services sectors next week, as well as more Fedspeak that will over clues on the central bank's next moves.
Major earnings reports scheduled for next week include Target