Markets declined between Feb. 13 and Feb. 19 as investors remained unconvinced of the possibility of rate cuts in the early months of 2024.

Markets closed in the red on Tuesday following the release of inflation data, which threatens the timing of the Federal Reserve’s first rate cut in 2024. The Dow Jones Industrial Average fell 1.4%, the S&P 500 fell 1.4% and the Nasdaq composite fell 1.8%.

The Consumer Discretionary Select Sector declined 2.0%, the Real Estate Select Sector declined 1.8% and the Technology Select Sector declined 1.7%.

The Chicago Board Options Exchange Volatility Index can be used as a fear gauge with investor sentiment about the status of equity markets. The CBOE Volatility Index rose 13.8% to $15.85 on Tuesday.

The Bureau of Labor Statistics reported that the Consumer Price Index increased 0.3% month over month to start 2024, higher than Wall Street’s consensus of 0.2%. Core CPI, which excludes volatile food and energy costs, rose 0.4% month over month in January. As inflation remains sticky, investors remain pessimistic regarding the potential of early rate hikes in 2024.

By Wednesday’s close, the three major indexes rebounded following a steep sell-off after the release of the CPI report. The Dow added 0.4%, the S&P 500 added 1.0% and the Nasdaq added 1.3%.

The Industrials Select Sector increased 1.7%, the Communication Services Select Sector increased 1.6% and the Consumer Discretionary Select Sector increased 1.1%. 

The CBOE Volatility Index declined 9.3% to a value of $14.38.

The three major indexes gained on Thursday after the release of weak retail sales data. The Dow rose 0.9%, the S&P 500 rose 0.6% and the Nasdaq rose 0.3%. The Energy Select Sector climbed 2.8%, the Real Estate Select Sector climbed 2.4% and the Materials Select Sector climbed 1.9%.

The U.S. Census Bureau detailed that retail sales fell 0.8% in January, boosting investor confidence regarding the potential of rate cuts in 2024. The CBOE Volatility Index declined 2.6% to $14.01.

The Department of Labor announced that jobless claims declined from 8,000 to 212,000 for the week ended Feb. 10.

By Friday’s close, the three indexes declined following the release of the Producer Price Index for January. The Dow lost 0.4%, the S&P 500 lost 0.5% and the Nasdaq lost 0.8%. 

The Bureau of Labor Statistics reported that the PPI rose 0.3% in January which exceeded the consensus estimate of 0.1%.

Markets were closed on Monday, Feb. 19 in observance of President’s Day.

As the Fed contemplates the future of interest rate cuts in 2024, investors should remain vigilant of the release of further economic data. Weak economic data could force the Fed’s hand in maintaining an elevated funds rate for the remainder of 2024.