Stocks down on mixed economic news

S&P, Dow sink as Feds signal no lowering of interest rates

NEW YORK — U.S. stocks slipped Thursday after a mixed batch of economic data seemed to drive the final nail into hopes that easier interest rates may arrive very soon.

The S&P 500 fell

14.83 points, or 0.3 percent, to 5,150.48, though it’s still close to its all-time high set Tuesday. The Dow Jones

Industrial Average sank 137.66, or 0.4 percent, to 38,905.66, and the Nasdaq composite lost 49.24, or

0.3 percent, to 16,128.53.

The moves were more decisive in the bond market, where Treasury yields rose after a report showed inflation was a touch hotter at the wholesale level last month than economists expected. It’s the latest in a string of data on inflation that’s been worse than forecast, which has kept the door closed on earlier hopes that the Federal Reserve could start cutting interest rates at its meeting next week.

But other reports released Thursday also showed some softening in the economy, which kept alive hopes that the long-term trend for inflation remains downward.

Traders still see largely expect the Fed to begin cutting rates in June, according to data from CME Group. The Fed’s main rate is at its highest level since 2001 in hopes of grinding down inflation, and cuts would relieve pressure on the economy and financial system.

The question hanging over Wall Street is how much the latest signals of potentially stubborn inflation will ultimately delay rate cuts. That in turn could damage the huge run U.S. stocks have been on since late October, rising in 16 of the last 19 weeks.

Traders on Thursday pushed some bets for the first cut to interest rates into July from June.

The day’s mix of data could push the Federal Reserve to signal it foresees only two cuts to rates this year, down from three, according to Brian Jacobsen, chief economist at Annex Wealth Management.

Fed officials will give their latest forecasts for where they see interest rates heading this year on Wednesday, following their latest policy meeting.

Among the data they’ll mull is a report from Thursday that said shoppers spent less at U.S. retailers last month than economists expected. Such data drags on the overall economy but could also remove upward pressure on inflation.