NEW YORK, Feb. 16 (Xinhua) -- U.S. stocks ended lower on Friday, as higher-than-projected producer prices dashed hopes for swift interest rate cuts by the Federal Reserve.
The Dow Jones Industrial Average fell 145.13 points, or 0.37 percent, to 38,627.99. The S&P 500 sank 24.16 points, or 0.48 percent, to 5,005.57. The Nasdaq Composite Index shed 130.52 points, or 0.82 percent, to 15,775.65.
Eight of the 11 primary S&P 500 sectors ended in red, with communication services and real estate leading the laggards by losing 1.56 percent and 0.99 percent, respectively. Meanwhile, materials and health led the gainers by rising 0.51 percent and 0.29 percent, respectively.
The producer price index (PPI) for final demand rose 0.3 percent in January, the largest increase since August 2023, after declining by a revised 0.1 percent in December, the Labor Department's Bureau of Labor Statistics said Friday.
Hospital outpatient care costs surged 2.2 percent in January, pushing up the overall services PPI. This jump is attributed to strong wage increases in the healthcare sector, potentially signaling broader inflationary pressures in the service industry, according to the statistical agency.
U.S. Treasury yields climbed after the report. Two Fed officials, Raphael Bostic and Mary Daly, stressed the need for careful policymaking. While Bostic acknowledged the possibility of rate cuts in the coming months, he emphasized the need for more data to confirm easing inflation. Daly, on the other hand, remained cautious, highlighting the importance of "more work" to achieve price stability.
"The Fed isn't losing the inflation fight, but they aren't winning either," said Christopher Rupkey, chief economist at FWDBONDS in New York. "The data are consistent, that January is a problematic month for inflation. There could be some seasonal adjustment problems as prices move up the most each year in the dead of winter."
Financial markets still expect the Fed to deliver its first rate cut this year, though the odds of a move in May are diminishing. The CME FedWatch Tool now shows a 31 percent chance for a cut of at least 25 basis points in May, down from 35.2 percent in the prior session.
Among the stocks moving on earnings news Friday, Coinbase and Applied Materials rallied, while Dropbox, Roku, DoorDash, Yelp and Opendoor Technologies dropped. ■