The S&P 500 (SPX) is down Friday following the release of the latest inflation data. Investors are reacting to the January Personal Consumption Expenditures (PCE) report and its 2.5% annual inflation. That matches economists’ expectations while improving from the 2.6% increase tracked in December.
The PCE offers key inflation data used by the Federal Reserve to measure the U.S. economy. While slowing inflation is nice, it’s unlikely to convince the Fed to end its pause on interest rate cuts. That’s because inflation continues to remain above the central bank’s 2% target. Even so, it’s likely two more interest rate cuts will be announced this year.
Investors are aware of this too as the SPX dropped 0.19% in early morning trading today. This extends its year-to-date loss of 0.34% while chipping away at its 52-week gains of 15.02%.
Which Stocks Weighed Down the S&P 500 Index Today?
Turning to the TipRanks SPX heatmap tool, traders will see which stocks are keeping the index down on Friday. Tech and communication services stocks are both in the red today, explaining why the S&P 500 is slipping. That makes sense as many tech stocks fit into the growth category, which doesn’t perform as well under increased interest rates. It also doesn’t help that Nvidia (NVDA) is dragging the sector down after its latest earnings report.
How to Invest in the S&P 500
Investors can’t take a direct stake in the S&P 500 as it’s only an index. Instead, they might consider buying shares included in it. Those expecting rebounds might invest in falling stocks today while others could purchase rising stocks while hoping for additional gains.
Another option available to investors is buying shares of an exchange-traded fund (ETF) that tracks the SPX. There are options for betting on or against the index with the SPDR S&P 500 ETF Trust (SPY) being a popular one in favor of the S&P 500.
