US stocks retreat as inflation picks up

US stock market continued retreating last week despite upbeat earnings reports as the Federal Reserve acknowledged rising inflation while keeping policy steady. The SP 500 lost 0.2% while the ICE dollar index rose 1.2% for the week.

The SP 500 fell every session last week except Tuesday and Friday. It lost 0.8% Monday. The broad market index recovered 0.3% Tuesday buoyed by technology shares rally led by Apple. It fell 0.7% Wednesday as Fed left monetary policy unchanged while acknowledging firming inflation. The SP 500 slid 0.2% Thursday despite upbeat corporate reports. SP 500 rallied 1.3% Friday led by technology shares.

The ICE US dollar index rose every session last week except Thursday. It gained 0.3% Monday as the personal consumption expenditure (PCE) index, the Federal Reserve’s preferred inflation gauge, rose to 2% year over year in March after 1.7% gain in February, hitting the central bank’s 2.0% target for the first time in a year. The dollar rose 0.7% Tuesday. The ICE dollar index added 0.3% Wednesday but fell 0.3% Thursday as the Institute for Supply Management’s nonmanufacturing index fell more than expected in April, dropping to 56.8 from 58.8. 3 The dollar index rose 0.2% Friday as the number of new jobs created rose to 164,000 in April from 135,000 in March.

Chinese trade report Tuesday, the Bank of England policy decision on Thursday and President Trump’s decision due before May 12 whether the US will abandon the Iran nuclear deal and re-impose sanctions on Iran are the most important events this week. No changes to UK interest rates are expected. The earnings season continues and Disney, Toyota, Ambev, and Nvidia are among many companies announcing earnings this week.