Posted on 05/12/2021 10:21:14 AM PDT by Red Badger
U.S. stocks declined sharply on Wednesday, led to the downside by technology shares as key inflation data showed higher-than-expected price pressures.
The Dow Jones Industrial Average fell 500 points, following its worst day since February on Tuesday. The S&P 500 lost 1.7%, while the tech-heavy Nasdaq Composite slid 2.5%.
The selling intensified after the S&P 500 fell below Tuesday’s low, a level traders were watching closely because of the intraday rebound one day ago. Once the S&P fell below that low about an hour into the trading day, the benchmark fell even further.
Inflation accelerated at its fastest pace since 2008 last month with the Consumer Price Index spiking 4.2% from a year ago, compared to the Dow Jones estimate for a 3.6% increase. The monthly gain was 0.8%, versus the expected 0.2%.
Excluding volatile food and energy prices, the core CPI increased 3% from the same period in 2020 and 0.9% on a monthly basis. The respective estimates were 2.3% and 0.3%.
Investors have been fearful of a pickup in inflation as it could squeeze margins and erode corporate profits. If price pressures run too hot for a sustained period of time, the Federal Reserve would be forced to tighten monetary policy.
“There are people who think the Fed is not just behind the curve, they’re maybe missing the point and by the time they start to play catch up, it’s too late,” Wall Street veteran Art Cashin said Wednesday on CNBC’s “Squawk on the Street.”
Tech shares, which have been under pressure this week and this month, led the decline again Wednesday as bond yields jumped. Shares of Alphabet, Microsoft, Facebook, Amazon and Apple all fell more than 2%, while shares of chipmakers Nvidia and AMD were also lower. Tesla slid about 3%.
Strength in bank stocks and energy shares, which could do well in an inflationary environment, helped support the broader market. JPMorgan rose 1%, while Occidental Petroleum climbed 6.5%. Chevron also traded 2% higher.
The technology sector pulled off a big intraday reversal in the previous session where the Nasdaq Composite erased a loss north of 2% and ended the day flat. The blue-chip Dow, however, lost more than 450 points. The S&P 500 slipped 0.9%, but avoided its second straight 1% loss.
The Technology Select Sector SPDR is off by nearly 2% this week and 5% this month, as investors reassess the group’s high valuations in the face of rising inflation.
— CNBC’s Kevin Stankiewicz contributed reporting.
Vote Democrat!
Unexpected
I wonder if all those NY Libs on Wall Street are getting buyer’s remorse?..................
#ThanksBiden
Watch it return tomorrow. Liberal money will continue to prop up the markets.
The dems have gotten their wish. They wanted to crash the economy so as to get rid of Trump. It remains to be seen if the democrat party is given the blame that it so richly deserves.
All those “-—tions” brought to you by democrats.
Inflation, taxation, regulation, recession (oops, not exactly a ‘...tion’, but the same thing).
Biden - the 21st century Jimmy Carter. Maybe that’s why he visited Jimmy - to compare notes.
I wonder how they figured out there was inflation _today_.....
too funny—where have these folks been hiding?
Got some pointers.................
7/16 OSB sheathing is now 49 dollars a sheet at Lowes. Up from 10 dollars a sheet pre-covid. That is almost a 500% increase.
Biden!
The Fed will NOT increase rates while Dems are in charge, they remember Jimmy Carter’s first and only term very well ...
And now, to top it off, there is a supply shortage of Chic-Fil-A dipping sauce.
Biden will get a new Volker in the Fed as inflation surges, interest rates will go up, and with them recession will return, leaving “Carter’s malaise” and stagflation.
Nay!
NY Libs are insane, so they’re not getting buyer’s remorse. They’re probably telling each other that climate change is causing this and we need to go full speed ahead with the GND.
#Bidinflation
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