HomeMarket News Utility Stocks Take a Tumble Following Slightly Higher Than Expected Inflation Data

Utility Stocks Take a Tumble Following Slightly Higher Than Expected Inflation Data

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Utility companies were dealt a blow in Thursday’s trading, as a hotter than anticipated U.S. inflation report for December had a significant impact on the market.

The U.S. Labor Department reported that core prices, which exclude volatile food and energy costs, increased by 3.9% from a year ago, slightly surpassing economists’ projections for a 3.8% rise.

These results triggered a sell-off in power producer stocks (NYSEARCA:XLU) and put them at the forefront of the S&P 500’s biggest losers for the day: AES Corp. (AES) -4.5%, WEC Energy (WEC) -4%, Alliant Energy (LNT) -3.5%, Pinnacle West (PNW) -3.4%, Consolidated Edison (ED) -3.2%, PG&E (PCG) -3.2%, CenterPoint Energy (CNP) -3.1%, NiSource (NI) -3%, CMS Energy (CMS) -3%.

This downturn occurred despite a drop in Treasury yields to their lowest levels in weeks, as investors shifted their attention from the increase in inflation to the prospect of easing price growth in the future.

The yield on the two-year Treasury plummeted by 11 basis points to 4.258%, marking its lowest level since December 29. Meanwhile, the yield on the 10-year Treasury fell by 5.5 bps to 3.974%, its lowest since January 3, and the 30-year yield saw a decline of 2 bps to 4.18%.

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