US benchmark equity indexes experienced mixed results on Tuesday as traders analyzed the latest producer price report while anticipating forthcoming official consumer inflation data. Notably, the producer price growth in the US unexpectedly decelerated last month on a sequential basis. This change was attributed to stable wholesale costs of services, alongside a cooling in goods' price increases, as reported by the Bureau of Labor Statistics.
The adjustments in producer prices provide a sense of relief, revealed Stifel in their analysis. A more subdued producer price report can be beneficial for the Federal Reserve, which is increasingly on guard regarding accelerating cost pressures in the economy. Moreover, small business optimism has reached its highest peak since October 2018, as confirmed by the December survey from the National Federation of Independent Business (NFIB).
The growing optimism among small businesses is linked to improved economic outlooks following the recent US presidential election. Bill Dunkelberg, the chief economist at NFIB, remarked, 'Expectations for economic growth, lower inflation and positive business conditions have increased in anticipation of pro-business policies and legislation in the new year.' This optimistic sentiment signals a potential shift in the economic landscape favorable to business enterprises.
In the oil market, February West Texas Intermediate crude oil experienced a decline of $1.09, settling at $77.73 per barrel. Concurrently, March Brent crude, recognized as the global benchmark, was last noted down $0.92 at $80.09. This downward trend correlates with growing concerns regarding the potential impact of President-elect Donald Trump's proposed tariffs on US imports, which has shifted market dynamics.
In stock market news, shares of Constellation Energy (CEG) appreciated by 3.5% after both UBS and Jefferies adjusted their price targets upward for the company’s stock. Conversely, Eli Lilly (LLY) faced a downturn with shares plummeting by 6.6%. This decline followed the pharmaceutical giant’s announcement to lower its revenue expectations for the fourth quarter and full year, attributed to slower-than-expected growth in its US incretin division.
This stock performance encapsulates the volatility often found in reaction to economic reports and forecasts, highlighting the intricate dance between market expectations and real-time business performance..