Equity Markets Slid Lower for Fourth Consecutive Week

Wall Street saw momentum ebb and flow throughout last week, with stocks ultimately closing lower for the fourth week in a row. Investors were influenced by growing uncertainty over inflation and tariffs. Despite a strong close to the week, the overall decline in equities has been notable. In less than a month, the major benchmark indexes moved into correction territory at a rapid pace. Bond yields rose from 4.21% at the start of the week to 4.30% last Friday. Crude oil prices ticked higher by week’s end as geopolitical uncertainty, particularly over the Ukraine war, continued to weigh on supply and demand concerns.

Inflation Indexes Slowed in February

Consumer prices growth slowed in February. According to the latest information from the Bureau of Labor Statistics, the Consumer Price Index (CPI) ticked up 0.2% in February after climbing 0.5% in January. Over the last 12 months ended in February, the CPI rose 2.8% following a 3.0% increase for the year ended in January. The CPI less food and energy rose 0.2% in February, following a 0.4% increase in January. The CPI less food and energy index rose 3.1% over the last 12 months. Energy prices decreased 0.2% for the 12 months ended February. Food prices increased 2.6% over the last year. Gasoline prices declined 1.0% in February and 3.1% since February 2024.

The Producer Price Index (PPI) was unchanged in February after advancing 0.6% in January. For the 12 months ended in February, the PPI rose 3.2%. In February, a 0.3% increase in prices for goods offset a 0.2% decline in prices for services. The PPI less food, energy and trade services moved up 0.2% in February after rising 0.3% in January. For the 12 months ended in February, prices less food, energy and trade services advanced 3.3%.

Eye on the Week Ahead

The Federal Open Market Committee meets this week. While it is unlikely that the Committee will adjust the federal funds rate at this time, investors will pay particular attention to the Committee’s assessment of the economy and whether it gives any indication of the timing of future rate changes.