Why Fidelity 500 Index Fund (FXAIX) Is Down This Week

Fidelity 500 Index Fund shares are trading lower this week alongside weakness in the broader market. The fund is lower during Friday's session after July PPI data showed greater-than-expected inflation.

Heightened inflation could prompt the Federal Reserve to consider raising interest rates to curb inflation. Higher interest rates could make bonds and other fixed-income investments more attractive compared to equities, potentially leading investors to shift away from stock index funds.

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Higher inflation can also be seen as a sign of an overheating economy. If inflation exceeds expectations, it might lead to concerns about the sustainability of economic growth. This could negatively affect the overall stock market, including index funds like the Fidelity 500 Index Fund.