DJIA: 31,834.11, down 326.63
S&P 500: 3,935.18, down 65.87
Nasdaq: 11,364.23, down 373.44
Stocks end lower; CPI report weighed
U.S. stocks finished lower in volatile trading Wednesday as Wall Street assessed a key update on inflation. The Consumer Price Index (CPI) climbed a bigger-than-anticipated 8.3% year-over-year in April, but cooled somewhat from the prior 8.5% annual reading that had been the highest since December 1981. However, core CPI (excluding food and energy) increased a larger-than-expected 0.6% on a monthly basis, twice the prior 0.3% pace. The figure highlighted the persistence of a broad array of underlying price pressures, bolstering expectations for a more aggressive path of Federal Reserve rate hikes.
The Dow fell 326 points, extending its losing stretch to five sessions. The S&P 500 erased an earlier gain to end down 1.7%. The broad benchmark retreated back below the 4,000 level to its lowest point since March 2021. The Nasdaq Composite slumped 3.2% as growth-related shares fared the worst, while the mega-cap Nasdaq 100 dropped 3.1% to a November 2020 trough. The small-cap Russell 2000 wiped out an advance of nearly 2% to close 2.5% lower. Longer-dated Treasuries strengthened, with the yield on the 10-year note slipping eight basis points (0.08%) to 2.91%, helped by strong demand metrics in the maturity’s $36 billion auction.
Eight of 11 S&P 500 sectors closed in negative territory, with Consumer Discretionary and Technology leading the downturn. Mega-cap names Tesla Inc. and Apple Inc. shed 8.3% and 5.2%, respectively. Elsewhere, video game maker Electronic Arts Inc. bucked the downtrend, jumping 8.1% after being the subject of an analyst upgrade on upbeat earnings. In other corporate news, Swedish Match AB agreed to be purchased by Philip Morris International Inc. for $16 billion.
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