Guests touch a lion dance costume during a ceremony to mark the first trading day of the Year of the Dragon at the Hong Kong Exchanges (HKEX) in Hong Kong, Wednesday, Feb. 14, 2024. (AP Photo/Louise Delmotte) Hong Kong Financial Secretary Paul Chan, center right, and Chairperson of Hong Kong Stock Exchange Laura M Cha, center left, attend a ceremony to mark the first trading day of the Year of the Dragon at the Hong Kong Exchanges (HKEX) in Hong Kong, Wednesday, Feb. 14, 2024. (AP Photo/Louise Delmotte) Hong Kong Financial Secretary Paul Chan speaks during a ceremony to mark the first trading day of the Year of the Dragon at the Hong Kong Exchanges (HKEX) in Hong Kong, Wednesday, Feb. 14, 2024. (AP Photo/Louise Delmotte) Currency traders watch monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, Feb. 14, 2024. Asian shares declined Wednesday, after disappointing U.S. inflation data sent shares sliding on Wall Street, raising prospects that interest rates will stay high for longer. (AP Photo/Ahn Young-joon) Hong Kong Financial Secretary Paul Chan, center right, and Chairperson of Hong Kong Stock Exchange Laura M Cha strikes the gong to mark the first trading day of the Year of the Dragon at the Hong Kong Exchanges (HKEX) in Hong Kong, Wednesday, Feb. 14, 2024. (AP Photo/Louise Delmotte) A currency trader gestures near the screens showing the Korea Composite Stock Price Index (KOSPI), right, at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, Feb. 14, 2024. Asian shares declined Wednesday, after disappointing U.S. inflation data sent shares sliding on Wall Street, raising prospects that interest rates will stay high for longer. (AP Photo/Ahn Young-joon) Hong Kong Stock Exchanges Chief Executive Officer Nicolas Aguzin speaks during a ceremony to mark the first trading day of the Year of the Dragon at the Hong Kong Exchanges (HKEX) in Hong Kong, Wednesday, Feb. 14, 2024. (AP Photo/Louise Delmotte) A currency trader watches monitors near the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Wednesday, Feb. 14, 2024. Asian shares declined Wednesday, after disappointing U.S. inflation data sent shares sliding on Wall Street, raising prospects that interest rates will stay high for longer. (AP Photo/Ahn Young-joon) Pedestrians pass the New York Stock Exchange as snow falls on Tuesday, Feb. 13, 2024 in New York. (AP Photo/Peter Morgan) Pedestrians pass the New York Stock Exchange as snow falls on Tuesday, Feb. 13, 2024 in New York. (AP Photo/Peter Morgan) The New York Stock Exchange on Wednesday, June 29, 2022 in New York. (AP Photo/Julia Nikhinson, File) Monitors show Nikkei stock index, yellow, at a foreign exchange trader's company in Tokyo, Thursday, Feb. 15, 2024. Shares rose in Asia on Thursday after Wall Street stocks recovered much of their sharp losses from a day before.(Kyodo News via AP) The New York Stock Exchange is seen in New York on Jan. 24, 2024. (AP Photo/Seth Wenig, File) The New York Stock Exchange on Wednesday, June 29, 2022 in New York. Stocks are off to a weak start on Friday, continuing a dismal streak that pushed Wall Street into a bear market last month as traders worry that inflation will be tough to beat and that a recession could be on the way as well. (AP Photo/Julia Nikhinson) TV crew members film an electronic stock board showing Japan's Nikkei 225 index at a securities firm as people pass by Friday, Feb. 16, 2024, in Tokyo. Shares advanced in Asia on Friday, with Tokyo's benchmark Nikkei 225 index trading near a record high, 34 years after it peaked and then plunged with the collapse of Japan's financial bubble. (AP Photo/Eugene Hoshiko) A person stands near an electronic stock board showing Japan's Nikkei 225 index at a securities firm Friday, Feb. 16, 2024, in Tokyo. Shares advanced in Asia on Friday, with Tokyo's benchmark Nikkei 225 index trading near a record high, 34 years after it peaked and then plunged with the collapse of Japan's financial bubble. (AP Photo/Eugene Hoshiko) A person walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Friday, Feb. 16, 2024, in Tokyo. Shares advanced in Asia on Friday, with Tokyo's benchmark Nikkei 225 index trading near a record high, 34 years after it peaked and then plunged with the collapse of Japan's financial bubble. (AP Photo/Eugene Hoshiko) A person rides a bicycle in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm in the cold morning of Friday, Feb. 16, 2024, in Tokyo. Shares advanced in Asia on Friday, with Tokyo's benchmark Nikkei 225 index trading near a record high, 34 years after it peaked and then plunged with the collapse of Japan's financial bubble. (AP Photo/Eugene Hoshiko) A person walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Friday, Feb. 16, 2024, in Tokyo. Shares advanced in Asia on Friday, with Tokyo's benchmark Nikkei 225 index trading near a record high, 34 years after it peaked and then plunged with the collapse of Japan's financial bubble. (AP Photo/Eugene Hoshiko) A person walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Friday, Feb. 16, 2024, in Tokyo. Shares advanced in Asia on Friday, with Tokyo's benchmark Nikkei 225 index trading near a record high, 34 years after it peaked and then plunged with the collapse of Japan's financial bubble. (AP Photo/Eugene Hoshiko) People walk past an electronic stock board showing Japan's Nikkei 225 index at a securities firm Friday, Feb. 16, 2024, in Tokyo. Shares advanced in Asia on Friday, with Tokyo's benchmark Nikkei 225 index trading near a record high, 34 years after it peaked and then plunged with the collapse of Japan's financial bubble. (AP Photo/Eugene Hoshiko) People photograph the Fearless Girl statue outside the New York Stock Exchange on Jan. 19, 2024, in New York. (AP Photo/Peter K. Afriyie, File)
NEW YORK (AP) — Stocks slipped Friday to send Wall Street to a rare losing week, just its second in the last 16.
The S&P 500 fell 0.5% from its all-time high set a day earlier. The Dow Jones Industrial Average dropped 145 points, or 0.4%, and the Nasdaq composite sank 0.8%.
A report in the morning on inflation at the wholesale level gave the latest reminder that the battle against rising prices still isn’t over. Prices rose more in January than economists expected, and the numbers followed a similar report from earlier in the week that showed living costs for U.S. consumers climbed by more than forecast.
Treasury yields rose immediately after the report’s release, adding pressure onto the stock market.
The data kept the door closed on hopes that the Federal Reserve could begin cutting interest rates in March, as traders had earlier hoped. It also discouraged bets that a Fed move to relax conditions on the economy and financial markets could come even in May.
The yield on the 10-year Treasury climbed to 4.28% from 4.24% late Thursday. The two-year Treasury yield, which more closely tracks expectations for the Fed, touched its highest level since December.
Higher rates and yields make borrowing more expensive, which puts the brakes on the economy and hurts prices for investments.
Still, the recalibrated bets for cuts to rates have simply brought Wall Street’s forecasts closer to what the Federal Reserve has been outlining. Critics have been saying traders’ expectations had gone overboard in how quickly and how much the Fed could cut rates in 2024.
The wide expectation for the Fed’s next move is still for a cut to its main interest rate, which is at its highest level since 2001, as it’s said it likely will do.
“Markets are likely to take a well-deserved breather following a staggering rally since October, though the lack of emotional reaction to elevated inflation readings and shifting Fed expectations reflect the optimism of investors,” said Mark Hackett, Nationwide’s chief of investment research,
In the meantime, the hope is that the economy continues to remain solid despite the challenge of high interest rates.
A preliminary report on Thursday suggested that sentiment among U.S. consumers is rising, though not by quite as much as economists hoped. That’s key because spending by consumers makes up the bulk of the economy.
In one potentially discouraging signal, the report from the University of Michigan also said that expectations for inflation in the coming 12 months ticked up to 3% in February from 2.9% in January.
If the economy does remain resilient, it would allow companies to deliver growth in profits, which can prop up stock prices.
Applied Materials climbed 6.3% after it reported stronger profit for the latest quarter than analysts expected. The company designs and manufactures systems used to fabricate semiconductor chips, and it’s benefiting from the frenzy underway for artificial-intelligence technology.
Cryptocurrency company Coinbase Global leaped 8.8% after it reported much better results for the latest quarter than forecast. Higher crypto prices helped drive more transaction revenue for the company.
On the losing end was Digital Realty, which sank 8.3%. The owner of data centers reported weaker results than expected.
All told, the S&P 500 fell 24.16 points to 5,005.57. The Dow Jones Industrial Average dropped 145.13 to 38,627.99, and the Nasdaq composite sank 130.52 to 15,775.65.
In stock markets abroad, indexes climbed across much of Europe and Asia.
In Japan, Tokyo’s Nikkei 225 rose 0.9% and got closer to its record high set at the end of 1989. That was just before Japan’s “bubble” economy burst as stock and real-estate prices plunged.
Japanese stocks have been rising recently even though its economy has shrunk to become the world’s fourth-largest.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
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