US OPEN: Wall Street opens lower after hotter than expected PPI data

• US indices launched today's cash trading lower

• US PPI rose unexpectedly in January

• Cisco Systems (CSCO.US) stock surges on upbeat financial results

• Shopify (SHOP.US) under pressure after weak financial guidance

• Fed's Mester comments put additional pressure on US stocks

Three major Wall Street indices launched another session in red, with Dow Jones trading 0.80% lower, while S&P500 and Nasdaq fell 1.15% and 1.3% respectively as the PPI jumped 0.7% MoM in January, the most since June 2022, while analysts expected a modest 0.4% gain. At the same time, initial jobless claims came in lower-than-expected at 194k pointing to a tight labor market. Fresh data and recent policymakers comments reinforced expectations that the Fed will need to extend its tightening cycle. Fed's Mester said the US central bank can accelerate the pace of hikes if conditions warrant it and rates must rise above 5% and remain there for an extended period of time. Mester also revealed at the most recent FOMC meeting, there was a compelling case for a 50 basis point increase.

S&P 500 index stocks categorized by sectors and industries. Size represents market cap. Source: xStation5

Despite the higher than expected PPI reading,  the pipeline for inflation looks like its continuing to decline with intermediate demand inflation down to +4.71% YoY. Source: Bloomberg via ZeroHedge

US500 pulled back sharply on Thursday as buyers again failed to break above crucial resistance at 4175 pts, which coincides with 23.6% Fibonacci retracement of the upward move started in March 2020. If current sentiment prevails, downward move may deepen towards key support at 4000 pts. Source: xStation5

Company news:

Cisco Systems (CSCO.US) stock rose over 3.5% before the opening bell after the digital communications technology conglomerate posted upbeat quarterly results. Company earned 88 cents per share, slightly above market estimates of 86 cents earnings per share. Revenue of $13.59 billion, also topped expectations of $13.43 billion.

Cisco Systems (CSCO.US) stock launched today's session higher and is trading above upper limit of the descending channel. If current sentiment prevails, an upward move may accelerate towards resistance at $52.00, which is marked with upper limit of the 1:1 structure, previous price reactions and 38.2% Fibonacci retracement of the upward wave launched in March 2020. Source: xStation5

Shopify (SHOP.US) stock plunged over 12.0% in off-hours trading after weak Q1 financial guidance overshadowed better than expected Q4 results. 

Roku (ROKU.US) shares jumped over 12.00% in premarket after the streaming device company posted better than expected revenue figures for the Q4 and recorded 16% increase of active users. Moreover the company expects that in the current quarter its streaming devices and content platform will continue to drive growth.

Twilio (TWLO.US) stock soared 15% after the cloud communications company beat quarterly revenue expectations. Recently the company announced another round of layoffs as it attempts to boost profitability.