US Stocks Fall Amid Inflation Fears as Tech Sector Shines

The US stock market ended the week in the red as inflation concerns and high yields persisted. The Dow Jones Industrial Average, S&P 500, and Nasdaq all declined, with the Dow falling 1.6%, S&P 500 losing 0.8%, and Nasdaq declining 0.7%. The decline was largely driven by rising oil prices and Treasury yields, which reignited concerns about inflation and the Federal Reserve's next move.

However, not all tech stocks were hit hard. Meta Platforms and Apple shares gained 5% and nearly 4% respectively on new AI releases and product launches. Meta's recent AI developments have deepened its argument that its spending is producing commercially valuable assets, while Apple's AI-powered iPhone features are expected to drive longer-term growth.

The inflation data released last week did little to calm concerns about elevated inflation. Producer prices rose 0.4% for the month, matching expectations, while the consumer price index also increased 0.4% month over month and 3.4% from a year earlier. Core CPI, which excludes food and energy, rose 0.3% on the month, slightly above expectations.

Market odds of a September Federal Reserve rate hike have risen to 87% from 58% a week earlier, according to the CME FedWatch tool. Expectations for another increase before year-end are also strengthening.