US stocks drift lower ahead of key inflation release
Investing.com -- US stocks drifted lower Monday as investors looked ahead to key key inflation data due this week that will likely play a pivotal role in the Federal Reserve's interest rate decision later this month.
At 1:05 p.m. ET (18:05 GMT), the Dow Jones Industrial Average was fell 122 points, or 0.3%, while the S&P 500 index fell 0.5%, and the NASDAQ Composite slipped 0.5%. CPI data awaited for more rate cues
The November consumer price index , due on Wednesday will offer more cues on inflation, the US economy and potential interest rate cuts.
The headline reading is expected to show a 2.7% year-on-year increase, a monthly increase of 0.2%, while core CPI inflation, which excludes volatile food and energy prices, is also expected to have remained significantly above the Federal Reserve's 2% target.
The increase in inflation for November is likely to be driven by higher food and energy prices, Goldman Sachs said in a recent note.
While the central bank is widely expected to cut interest rates by 25 basis points next week, it is also expected to slow its pace of rate cuts in 2025, given the still elevated inflation and a strong labor market.
Data on Friday showed stronger-than-expected growth in nonfarm payrolls in November, but the participation rate shrank, while growth in manufacturing payrolls underwhelmed.
"[T]he labor market is softer than in 2019 and has yet to convincingly stabilize, and this is the key reason we continue to pencil in further consecutive cuts," Goldman Sachs added. Macy's attracts activist investor attention; Nvidia, AMD drag down chips
Macy’s (NYSE:M stock rose nearly 2% following a report that activist investor Barington Capital is urging the retailer to create a real-estate unit and consider options for its Bloomingdale's and Bluemercury chains after building an undisclosed stake.
Hershey Co (NYSE:HSY ) climbed more than 13% after Bloomberg News reported that Mondelez (NASDAQ:MDLZ ) was exploring a takeover of the company.
Nvidia (NASDAQ:NVDA ) stock fell 2.3% after China launched an investigation into the chipmaker over suspected violations of the country's anti-monopoly law, in a move that will likely be seen as a retaliatory move against Washington's recent chip curbs.
A slump in Advanced Micro Devices Inc (NASDAQ:AMD ) also weighed on chip stocks after Bank of America downgraded the company neutral from buy, citing higher competitive risks.
The quarterly earnings season is gradually drawing to a close, but investors will still be able to study Oracle's (NYSE:ORCL ) results after the close Monday.
(Peter Nurse, Ambar Warrick contributed to this article.)
Source: Investing.com
