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S&P 500 flat as caution sets in ahead of inflation data

11 April 2023 19:21 (UTC +04:00)

The benchmark S&P 500 was little changed on Tuesday as investors stayed on the sidelines ahead of Wednesday's inflation data that could determine the U.S. Federal Reserve's next policy moves, APA reports citing Reuters.

Losses in megacap stocks such as Microsoft Corp (MSFT.O) and Amazon.com Inc (AMZN.O) weighed on the tech-heavy Nasdaq, while gains in industrial stocks such as Caterpillar Inc (CAT.N) boosted the Dow.

Hopes that the Fed will soon end its aggressive monetary policy tightening helped the S&P 500 stabilize so far in April after the collapse of two U.S. mid-sized lenders sparked a selloff last month.

A strong labor market report on Friday, however, lifted bets that the U.S. central bank will increase rates by 25 basis points in May, with money market traders pricing in a nearly 70% chance of such a move, according to CME Group's Fedwatch tool.

This marks a shift in traders' bets of a pause in the Fed's policy tightening after recent weak economic data raised the possibility of a U.S. recession.