Inflation reports unveiled in the week preceding the Fed meeting brought an unwelcome news to investors. Prices pressures surged more than expected in February, creating a headache for Federal Reserve Chair Jerome Powell, who had been pushing for greater confidence regarding the disinflationary trend before contemplating interest rate cuts.
Stocks flipped to the red after Thursday’s producer inflation data confirming concerns that emerged two days earlier in the consumer inflation report.
As market participants dialed back rate cut bets, risk sentiment faded with crypto and Bitcoin (CRYPTO: BTC) dragged to losses. Meanwhile, commodities outperformed, with gold holding near all-time highs and oil surging above $80 a barrel.
Powell’s Rate Dilemma
As inflation reasserts its presence, Fed Chair Powell faces pressure on the path to cut interest rates. Expert opinions on rate directions are now diverging, creating an uncertain policy scenario.
AI Stocks Exit?
Investors pulling out of AI tech stocks like NVIDIA Corp. (NASDAQ:NVDA), Advanced Micro Devices Inc. (NASDAQ:AMD) and Microsoft Corp. (NYSE:MSFT) may be acting prematurely, suggests Light Street Capital’s Glen Kacher. Kacher advises that we’re early in the AI investment cycle, making current valuations reasonable and highlights the potential growth of select “AI Five” companies.
Cruising’s Rising Tide
Goldman Sachs adopts a bullish outlook on the cruise sector, favoring Royal Caribbean Cruises Ltd. (NYSE:RCL) and Carnival Corp. (NYSE:CCL) due to industry shifts and expected pricing tailwinds.
Congressman’s Boeing Sale
A congressman’s sale of Boeing Co (NYSE:BA) stock just before a Department of Justice investigation announcement raises concerns over potential insider trading. The trade’s timing, especially given his committee position, has sparked calls for further investigation into whether non-public information influenced the decision.
TikTok Bill Advances
The U.S. House’s approval of a bill targeting TikTok has left many influencers anxious, given the app’s vast American user base of 150 million. The legislation’s progression underscored growing concerns over the app’s Chinese ownership and data security implications.
Musk Critiques TikTok Bill
Elon Musk voiced concerns about the proposed TikTok bill. He believed the bill was overly broad and susceptible to future misuse, reflecting growing debates over the app’s fate in the U.S. amid speculation of forced sales or bans.
Cannabis Stocks Surge
Speculation around the DEA’s impending rescheduling of cannabis to Schedule III fueled a significant rally in cannabis stocks on Friday. This move, anticipated to foster industry growth, sparked widespread optimism and strategic positioning among investors.
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