US Stocks Hit by Latest Inflation Data, Gold Prices Jump

AFP/APP

New York:  Wall Street stocks mostly fell Monday after fresh inflation data raised questions about US monetary policy, while gold prices shot to a fresh record.

The Institute for Supply Management’s March survey is the first to show US manufacturing activity rising since September 2022. But markets were fixated on a 3.3 percent rise in the ISM’s price index as compared with February.

“The market turned around when ISM came up this morning,” said Jack Ablin of Cresset Capital. “This is one sign that could show that inflation is picking up more.”

While the Nasdaq mustered a narrow gain, both the Dow and S&P 500 retreated.

Markets have been scrutinizing inflation data to gauge the likelihood of a shift in monetary policy.

The Federal Reserve has said it expects three interest rate cuts this year, but that plan could slide if inflation remains elevated.

US Treasury yields jumped after Monday’s ISM data.

In Asian trade, Seoul, Singapore, and Manila rose, while there were losses in Taipei and Jakarta.

Hong Kong, Sydney, Wellington, London, Paris, and Frankfurt were closed for Easter Monday.

Gold hit a record high of $2,265.73, according to Bloomberg News, extending the year’s rally fueled by central bank hints at an easing of credit conditions.

It is also being supported by its attraction as a safe haven in times of turmoil, with geopolitical tensions growing.

Shanghai jumped around one percent as traders welcomed news that China’s manufacturing grew for the first time in half a year, giving a boost to leaders as they battle to kickstart the struggling economy.

The 50.8 reading in March was the first showing expansion since September and was well above forecasts.

“The industrial sector seems to be resilient, partly helped by strong exports,” said Zhang Zhiwei at Pinpoint Asset Management.

“If fiscal spending rises and exports remain strong, the economic momentum may improve.”

But Tokyo sank more than one percent as the Bank of Japan’s closely watched Tankan survey showed that confidence among Japan’s largest manufacturers slipped in the first quarter, having risen for three straight quarters.