Stocks Rise After Inflation Data

Stocks rose Friday and bond yields edged down, suggesting that the market volatility driven by higher-than-expected inflation data could ease.

The S&P 500 ticked up 0.1%, after the broad index closed down 1.8% Thursday. The Nasdaq Composite advanced 0.2%. The Dow Jones Industrial Average rose 0.1%.

Zillow

rose 14.1% after it reported a jump in revenue for its core unit, despite losing $ 881 million on its closed home-flipping business last year. Fintech company

Affirm

tumbled 10.6% after its sales forecast came in below Wall Street’s expectations. It plunged 21% Thursday.

Apollo Global Management

dropped 4.2% Friday after it reported a lower profit. The Wall Street Journal reported that the private-equity firm was nearing a deal to buy

Worldline‘s

WLN 6.13%

point-of-sale terminal business, after which the French payment firm’s shares rose 5.9%.

The yield on the benchmark 10-year Treasury note climbed to 2.036%, before easing to 2.001%. It rose above 2% for Thursday the first time since mid-2019, closing at 2.028%. Yields rise when prices fall. The yield on two-year bonds rose to 1.629% Friday before also reversing moderately.

“The move is coming as the number of expected rate hikes rises this year. We’re in a process where the Fed is catching up to the market, ”said Sebastien Galy, a macro strategist at

Nordea Asset Management.

Some think rising inflation means companies are forced to raise their prices. But as WSJ’s Dion Rabouin explains, it actually works the other way around: Corporations actually drive inflation, and data show that they have been and will continue to push prices up for some time. Illustration: Elizabeth Smelov

Markets have traded choppily this week, buffeted by earnings reports and shifting expectations about the prospective pace of central banks’ monetary tightening. Data on Thursday showed that inflation hit 7.5% in January, a four-decade high. A Federal Reserve official said the central bank might have to move more drastically to curtail consumer prices, spoiling investors.

“Inflation is currently in the public eye, it has become a political question,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers. “This is something that is concerning us, we have a rising risk of monetary policy mistakes. This is the number one risk we see in 2022. ”

The University of Michigan’s consumer sentiment gauge for February is due at 10 am ET.

Overseas, the pan-continental Stoxx Europe 600 slipped 0.5%.

Mercedes-Benz

shares rose 5.8% after the auto maker put out preliminary results that beat expectations.

In Asia, the Shanghai Composite Index fell 0.7%, while Hong Kong’s Hang Seng Index ticked down 0.1%. Markets in Japan were closed for a public holiday.

Traders worked on the floor of the New York Stock Exchange on Thursday.


Photo:

David L. Nemec / Associated Press

Write to Anna Hirtenstein at [email protected]

Corrections & Amplifications
The yield on the benchmark 10-year Treasury note climbed to 2.036%, before easing to 1.996%. An earlier version of this article incorrectly said the yield rose to the highest intraday level since August 2019. (Corrected on Feb. 11.)

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