Wall Street Ends the Month Lower Amid Inflation Pressures and Geopolitical Risks

The last week of the month proved to be a tough one for Wall Street. Each of the major benchmark indexes closed the week lower, impacted by stubborn inflation and a cooling of major tech and AI stocks. The Producer Price Index rose faster than in the previous two months, which fueled fears that the Federal Reserve will keep interest rates at their current level for longer than investors hoped. Geopolitical risks provided a backdrop of uncertainty. U.S.-Iran tensions escalated, which directly impacted crude oil prices. Financials and Information Technology were laggards among the market sectors, while defensive sectors, such as Consumer Staples, Utilities and Health Care, outperformed.

Producer Prices Rise Sharply in January as Services Drive Inflation

The Producer Price Index increased 0.5% in January after advancing 0.4% in December 2025 and 0.2% in November. Producer prices rose 2.9% for the 12 months ended January 2026. The January increase in prices can be traced to a 0.8% increase in the prices for services. In contrast, prices for goods declined 0.3%. Producer prices less food, energy and trade services moved up 0.3% in January, the ninth consecutive monthly increase. For the 12 months ended in January, prices less food, energy and trade services rose 3.4%.

Eye on the Week Ahead

The labor figures for February are out this week. New jobs grew by 130,000 in January. Also out this week are the February purchasing managers’ surveys for both manufacturing and services.