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US stocks slipped on Monday after strong economic data and new comments from Jerome Powell dashed hopes for a March interest rate cut.
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The January ISM report showed a surge in manufacturing and services activity.
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Fed Chairman Jerome Powell told “60 Minutes” that “the job is not quite done” when it comes to inflation.
US stocks tumbled on Monday after strong economic data and new comments from Federal Reserve Chairman Jerome Powell dashed investor hopes for a March interest rate cut.
The January ISM report showed a surge in both manufacturing and services activity, which has been a leading indicator for the stock market and the economy alike. ISM manufacturing new orders rose more than five points and jumped above 50 for the first time since March 2022, according to the report.
The strong economic data, combined with the impressive January jobs report, should give the Fed more flexibility in the timing of its interest rate cuts.
Meanwhile, Powell told “60 Minutes” in an interview that aired on Sunday that the central bank’s key task in reigning in inflation isn’t finished. Powell said cutting interest rates too soon poses a risk because “the job is not quite done” in taming inflation.
“The prudent thing to do is to, is to just give it some time and see that the data continue to confirm that inflation is moving down to 2% in a sustainable way,” Powell said.
Those comments dashed investor hopes of an interest rate cut at the Fed’s March meeting, with the probability of a rate cut falling to 16.5% on Monday from nearly 50% last week, according to the CME Fed Watch Tool.
Here’s where US indexes stood at the 4:00 p.m. closing bell on Monday:
Here’s what else happened today:
In commodities, bonds, and crypto:
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West Texas Intermediate crude oil jumped 0.73% to $72.81 a barrel. Brent crude, the international benchmark, rose 0.93% to $78.05 a barrel.
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Gold declined 0.58% to $2,041.60 per ounce.
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The 10-year Treasury yield surged 14 basis points to 4.17%.
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Bitcoin dropped 0.69% to $42,409.06.
Read the original article on Business Insider