Inflation Problems. It turns out investors care about more than just oil prices. Stocks opened lower this morning after the latest measure of inflation, the producer price index, showed an uptick in pricing pressures. PPI, which tracks wholesale prices, rose 0.7% in February, versus economists’ 0.3% estimate and ahead of January’s 0.5% rate.

Then the real news hit: the Fed kept its rate cuts on pause and chair Jerome Powell expressed some disappointment about the state of inflation. The selloff kicked into gear.

By the close, the Dow Jones Industrial Average had shed 768 points, or 1.6%. The S&P 500 fell 1.4% and the Nasdaq Composite lost 1.5%. Among stocks, there was no place to hide. All 11 S&P 500 sectors finished the day in the red, led by a 2.4% loss for consumer staples.

In their Summary of Economic Projections, Fed officials continue to point to one rate cut this year, but Powell’s tone during his press conference this afternoon made even that forecast sound dubious. “There is also just the feeling that we haven’t seen the progress that we hoped for on core goods,” Powell said.

“The key message out of today’s meeting is that the Fed is judging that the balance of risks is tilting toward concerns over inflation, which warrants a more cautious rate cut path over the near-term,” wrote Jason Pride, chief of investment strategy and research at Glenmede.

With investors already on edge about conflict in the Middle East and the surging price of oil, Powell’s uncertain tone might have been one too many unknowns for the market, pushing stocks down into the close.

“Rate cuts are not off the table for this year, but given the geopolitical nature of that risk, there will likely be considerable uncertainty over the future path for rates,” Pride added.

The Hot Stock: LyondellBasell Industries +5.6%
The Biggest Loser: Carvana -7.5%

Best Sector: Energy -0.2%
Worst Sector: Consumer Staples -2.4%

Powell had little certainty to offer investors about rates but he offered a rare dose of blunt talk about the rest of his career. His term as Fed chair expires on May 15.

After a question about plans should his successor, Kevin Warsh, not be confirmed by then, Powell offered some straight talk, including about the Department of Justice probe of him. I’m including the comments in full because of how out of character they were for a Fed chair best known for cloaking his future decisions:

There you have it. For more on Powell’s press conference and the Fed’s big day, read Barron’s coverage here.

Accenture, Alibaba Group Holding, Darden Restaurants, FedEx, Planet Labs, and Signet Jewelers report earnings tomorrow.

The Census Bureau reports new residential sales data for January. Economists forecast a seasonally adjusted annual rate of 725,000 new single-family homes sold, 20,000 fewer than in December. The median sales price of a new home was $414,000 at the end of last year, a 2% decline from December 2024.

• The Fed Expects Inflation to Stay High. Here Are Moves to Make With Your Portfolio.

• Micron Reports Extraordinary Earnings. Its Growth Is Accelerating.

• Meta Wants Influencers to Come Back to Facebook. It’s Willing to Pay.

• Private-Credit Fears Are Spreading: What Financial Advisors Are Telling Clients

• Nvidia Won AI’s First Battle. The Next Round Won’t Be So Easy.

Barron’s Live returns on Monday. Barron’s Live features timely and actionable insights for investors. We give you behind-the-scenes conversations with the newsroom, connecting you with our editors and reporters covering the markets, the economy, and more.

Sign up here