US stocks struggle for direction as inflation slows, but Nike slump weighs By Investing.com

Investing.com — U.S. stocks struggled for direction Friday, as inflation slowed more than expected, propping up bets for the Fed to cut rates as soon as March, though a slump in Nike weighed on sentiment. 

By 14:25 ET (19:25 GMT), the contract was down 48 points, or 0.1%, was 0.1% lower, and fell 0.1%.

These averages are on course for their eighth positive week in a row – a first for the since 2017 and for the DJIA dating back to 2019. 

Fresh signs disinflation train gaining steam

The , the Fed’s primary inflation gauge, for November slowed by 0.1%, taking the annualized rate through November to 2.6%, below expectations of 2.8%. 

The measure that strips out volatile food and energy costs, and is more important measure of underlying inflation slowed to a 0.1%, compared with expectations for 0.2%. 

Signs of faster slowdown inflation boosted expectations for a sooner rather than later rate cut, with the odds of a March cut at 85%, compared with 75% a day, according to Investing.com’s Fed Rate Monitor Tool. 

Investors are now expectations 175 basis points of by the end of next year, taking the Fed funds rate to a range of 3.5% to 3.75% range. That is much more aggressive the three rate cuts for 2024 the Fed projected at its December meeting. 

Nike slumps on weak revenue outlook; Tesla recalls over 120K EVs 

Nike (NYSE:) cut its annual sales forecast, warning of a softer second-half revenue outlook on cautious consumer spending, sending its shares nearly 12% lower.

The sportswear giant now sees full fiscal-year revenue rising about 1%, down from its prior forecast of mid-single-digit percentage growth. 

The company also detailed plans to cut up to $2 billion in costs over a three-year period, which is equivalent of 50% of Nike’s annual demand creation expense budget, RBC says, so “if redeployed effectively, could be helpful towards mid-term growth and profitability in our view.”

The lowered guidance reflecting a worse than expected consumer demand environment across markets, sent shares of peers and retailers including Foot Locker Inc (NYSE:) sharply lower.

Tesla (NASDAQ:) was slightly lower as the EV maker is set to recall over 120,000 Model S and Model X vehicles in the U.S. over the risk of cabin doors being unlocked during a crash, the country’s road safety regulator said on Friday.

Karuna Therapeutics jumps on Bristol Myers Deal; Rocket Lab flies higher after on $515M contract win

Karuna Therapeutics Inc (NASDAQ:) jumped nearly 50% after Bristol-Myers Squibb Company (NYSE:) announced a deal to buy the company for $14 billion. 

Rocket Lab USA, Inc. (NASDAQ:) said its subsidiary won a contract worth $515 million from the U.S. government to produce and operate 18 space vehicles. Its shares jumped 22%.

(Peter Nurse contributed to this report.)