Market Update: Inflation Cools While Stocks Remain Volatile

• Small Business Confidence: The NFIB Small Business Optimism Index dipped slightly to 100.8, below expectations of 101.0, reflecting lingering economic uncertainty.
• Consumer Sentiment: The University of Michigan Consumer Sentiment Index fell to 57.9, marking its lowest level in over two years.

• Consumer Price Index (CPI): February saw cooling inflation, with monthly CPI and core CPI rising by just 0.2%, lower than the expected 0.3%.
• Year-over-year CPI growth:2.8%, down from the prior 3.0%.
• Producer Price Index (PPI): Producer inflation declined, with monthly PPI flat at 0.0% and core PPI declining -0.1%, reflecting a slowdown in cost pressures for businesses.

• Consumer Staples & Discretionary: Procter & Gamble, Home Depot, Costco, and Walmart each fell more than 4%.
• Technology & Communication Services: Tesla and Alphabet also declined at least 4%, reflecting broader economic concerns.

• 2-year Treasury yield: Rose 1.5 basis points (bps).
• 5-year Treasury yield: Fell 1 bp, closing at 4.08%.
• 10-year Treasury yield: Declined 1 bp, finishing at 4.31%.

• Inflation, as measured by CPI and PPI, moderated more than expected.
• Both small business and consumer confidence fell below expectations.
• Tariff-related headlines drove volatility, pushing all three major U.S. stock indices down more than 2%.
• Despite equity turbulence, the Treasury yield curve remained mostly unchanged.

• Monday, March 17: Retail sales data for February and the NAHB Housing Market Index for March. Retail sales are expected to rebound, while home builder confidence is projected to hold steady.
• Wednesday, March 19: The Federal Reserve will release its March rate decision, with interest rates expected to remain unchanged.
• Thursday, March 20: Existing home sales data for February will be published, with analysts anticipating a second consecutive month of declining sales.

Tom Hine is aCERTIFIED FINANCIAL PLANNER^®professionaland owner of Capital Wealth Management. He works with individuals and families on financial planning, retirement strategies, and investment management. With offices in Glastonbury and Wilton, CT, Tom serves clients across Connecticut and throughout the U.S. Connect with Tom

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