Dow falls nearly 200 points after another hot inflation report: Live updates

Sarah Min

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Stocks fell Thursday after another hot inflation report, and a decline in jobless claims, showed the economy is holding up amid the Federal Reserve’s rate hikes.

The Dow Jones Industrial Average shed 189 points, or 0.55%. The S&P 500 dipped 0.52% and the Nasdaq-Composite fell 0.49%.

Microsoft and Amgen contributed the most to the Dow’s decline, losing nearly 1% each. Every S&P 500 sector fell, with real estate, utilities and industrials leading the way lower.

January’s producer price index, another inflation measure, rose 0.7% on the month while economists surveyed by Dow Jones expected a 0.4% increase. Initial jobless claims unexpectedly fell for the week ending February 11, per a Labor Department report.

The new data comes after January’s consumer price index and retail sales report were both higher than expected, suggesting that the Federal Reserve may have further to go in its efforts to tame inflation.

“Both inflation readings this week point to the stickiness of inflation and that the fight isn’t over, especially when considering today’s PPI reading was the highest month-over-month increase since early summer,” said Mike Loewengart, head of model portfolio construction at Morgan Stanley.

Loewengart added that declining jobless claims suggest the labor market remains tight.

“It shouldn’t be a surprise to see the market take a breather as hopes of a dovish Fed in the coming months fade,” he said. “Bottom line is investors should recognize inflation may not return to normal levels as quick as many hope, and with that may come more volatility.”

Still, markets have remained resilient. On Wednesday, the Dow Jones Industrial Average rose 38.78 points, or 0.11%, and the S&P 500 climbed 0.28%. Meanwhile, the Nasdaq Composite notched its third straight day of gains, rising 0.92%.