The Dow Jones industrial average turned lower after a key inflation report early Thursday, in the wake of hot Consumer Price Index news that hit markets hard. Meanwhile, artificial intelligence leaders Nvidia and Microsoft are in focus on the stock market today.
The S&P 500 and Nasdaq did find support at their 10-week moving averages Wednesday, with Nvidia providing some support. But the Russell 2000 gapped below its 50-day line with the Dow Jones clearly below that key level.
Nvidia and Microsoft stock got new price target hikes early Thursday. Nvidia stock nudged higher after Wednesday's buck-the-trend bounce, while Microsoft edged up.
And at another Magnificent Seven company, Amazon.com, Chief Executive Andy Jassy pledged to continue cost cuts while pushing hard into artificial intelligence, including its own AI chips. Shares were little changed early.
Elsewhere, Vertex Pharmaceuticals climbed 0.9% after a takeover deal for Alpine Immune Sciences, which soared 36%. Regeneron Pharmaceuticals fell modestly after the Justice Department accused it overcharging Medicare for its key drug Eylea.
Fastenal and CarMax sold off 4.4% and 9% after both missed on earnings and sales early Thursday. Constellation Brands rose 1.3% at the open after topping analyst forecasts.
Producer Price Figures Show Inflation Taming
In economic news, the Labor Department released the March producer price index and weekly jobless claims at 8:30 a.m. ET Thursday.
The March PPI rose 0.2% after February's 0.6% jump, below views for a 0.3% gain. Core PPI, which excludes food and energy, met forecasts for a 0.2% advance.
PPI inflation came in at 2.1% vs a year earlier, picking up from February's 1.6% but below expectations for 2.3%. Core PPI inflation stepped up to 2.4%, up from February's 2% and slightly above views for 2.3%.
Key elements in the PPI report feed directly into the core personal consumption expenditures price index, the Fed's favorite inflation report. Those details suggested slightly tamer core PCE price gains in March.
Also, initial jobless claims fell 11,000 to 211,000 in the week ended April 6, below views for 215,000.
Dow Jones Futures
The Dow Jones average fell 0.6%, while the S&P 500 dipped 0.35%. The Nasdaq composite edged higher, fading from early gains.
The 10-year Treasury yield rose to 4.59% after some fluctuation. Crude oil futures fell slightly.
Stock Market Falters
In Wednesday's stock market trading, it became clear the stock market rally is under pressure. The Dow Jones index fell 1.1% to a two-month low as consumer inflation came in hotter than expected.
Meanwhile, the S&P 500 and Nasdaq composite sank nearly 1% and 0.8%, respectively, both sliding through the 21-day line. And the Russell 2000 gapped down 2.5%.
Further, the 10-year Treasury yield spiked 19 basis points to 4.56%, the highest since mid-November.
Markets now see just two rate cuts in 2024, and even that's shaky. Investors are starting to price in a small chance there will be no Fed rate cuts this year.
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Nvidia, Microsoft Stock Price Targets Raised
Nvidia stock rose 0.8% Thursday. Raymond James raised its price target to 1,100 from 850, signaling 26% upside for the AI chip leader.
On Wednesday, shares rose 2% to 870.39, rebounding from the 10-week line to just below the 21-day line.
Nvidia stock is on track to have a flat base soon with a 974 buy point. Investors could use a decisive move above the 21-day line and a break of a short trendline as an early entry.
Microsoft stock dipped 0.1% on the stock market today. Morgan Stanley raised its price target to 520 from 465, citing its generative AI leadership.
On Wednesday, the Dow giant dipped 0.7% to 423.26, but rebounded from the 21-day and held a 420.82 buy point from a short consolidation. Microsoft stock could be working on a three-weeks-tight pattern.
Amazon Hits Sweet Spot For Investors
Amazon CEO Jassy hit two sweet spots for investors in his annual shareholder letter, touting cost cuts and a focus on AI. He touted Amazon's own in-house chips.
That follows the lead of other Magnificent Seven companies. Microsoft has developed its own in-house AI chips. Google parent Alphabet and Meta Platforms both unveiled their own AI chips as well this week, with Google using designs from Arm Holdings.
The aim is to lessen reliance on Nvidia's advanced AI chips.
Amazon stock edged up 0.2% early Thursday. Shares climbed to a record close Wednesday.
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Biotech News On Stock Market Today
In biotechs, Vertex Pharmaceuticals will pay $65 a share or $4.9 billion, for Alpine Immune Sciences, which is working on a treatment for inflammatory kidney diseases. That's a 67% premium to Tuesday's close. Alpine stock soared early Thursday after jumping 21% Wednesday on takeover buzz.
Vertex stock edged higher, aided by an Evercore upgrade to outperform. Shares are in a flat base with a 448.40 buy point, but have been trending lower since late January.
Regeneron stock has a 998.33 flat-base buy point, but is trading below its 50-day line, according to MarketSurge. Shares opened at a three-month low.
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