U.S. stocks closed mixed Friday, giving up most of their opening gains as oil reversed and inflation data increased expectations for a rate hike in the coming year. ( Tweet This )
"I think today's been quite a watershed day in some ways because of the core PCE data this morning," said Lee Ferridge, head of macro strategy, North America, at State Street Global Markets.
Markets are thinking, "maybe we should start pricing the Fed back in," he said, noting the rise in the U.S. dollar against the euro following the report.
The three major averages still ended the week more than 1.5 percent higher for a second-straight week of gains. The Dow transports gained 1.6 percent for their sixth-straight week of gains, the first such win streak since the seven week of gains ended Nov. 28, 2014.
The core personal consumption expenditures price index, which excludes food and energy, is the Fed's preferred inflation measure and showed a 1.7 percent rise in the 12 months through January, the largest since July 2014.
"While most thought June was off the table (for a rate hike), this kind of data puts the path to getting to a June rate hike very clear, especially if the volatility in the market dissipates," said Jeremy Klein, chief market strategist at FBN Securities.