Stocks reverse previous gains to close lower with focus on inflation data

US stocks pared gains and fell in the last hour of trading on Tuesday to close the second consecutive session in the red as investors evaluated new inflation data from Washington that showed prices accelerating in March to a new 40-year high.

The S&P 500 slipped 0.3%, and the Dow Jones Industrial Average gave up its intraday rally to close trading down about 90 points. The Nasdaq Composite faltered after an earlier advance, falling 0.3%. Meanwhile, Treasury yields fell slightly, but the benchmark 10-year yield remained above 2.7%, the highest level since January 2019.

The moves follow an earlier bounce in stocks after some key elements in Tuesday’s reading of the Consumer Price Index (CPI) came in less sharp than expected, with the core figure approaching consensus numbers.

“While inflation today is at its highest level in four decades, there has been a vent of relief with some components of core inflation weakening,” Charlie Ripley, senior investment analyst at Allianz Investment Management, said in a note.

Investors focused on the latest gauge of US inflation in the Tuesday session. The Bureau of Labor Statistics (BLS) CPI rose 8.5% in March compared to the same month last year, according to the latest report released Tuesday. This number represents the fastest rise since December 1981 and follows a 7.9% annual increase in February. Heading into the report, economists had been expecting a jump of 8.4% for the month of March, according to Bloomberg data.

“In terms of peak inflation, we’ve been at this point before where slight shifts in the data show that the inflation level has peaked for the cycle only to keep rising,” Ripley said. “Going forward, the biggest concern is really about how entrenched inflation is at a time when Americans continue to worry about higher prices.”

Hot red edition comes as investors wrestle with possibility Federal Reserve officials will act more aggressively to combat inflation after… Harsh readings of the minutes of the central bank meeting last week in March He noted that “many” policy makers “were in favor of a 50 basis point increase” in benchmark interest rates last month.

“Investors are laser-focused on what the Federal Reserve will do at its upcoming meetings, and it looks like a 50 basis point price hike is more and more,” said Bill Price, head of investment management at Commonwealth Financial Network, in response to the CPI print. . “The market appears to be ruling out 50 basis point hikes and many Fed members have been very vocal about their desire to curb inflation.”

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Although investors have been largely prepared for the possibility that federal policy makers will be more combative in their efforts to combat inflation, concerns have emerged that further monetary tightening could cause an economic downturn.

Strategists have begun discussing the possibility of a broader recession in recent weeks, particularly with economists at Deutsche Bank recently warning that central bank actions could slow growth significantly in the second half of 2023.

Some said it was too early to make such a call but the possibility is on the table.

Dreyfus and Mellon, chief economist and macro strategist, said: Vince Reinhart on Yahoo Finance Live.

4:00 PM ET: Stocks closed lower after a detour from previous highs

Here’s how the major indicators performed at the end of Tuesday’s trading session:

12:39PM ET: JPMorgan shares are down nearly 16% since the beginning of the year

JP Morgan is a file The first major bank to reveal first-quarter results on Wednesday With earnings season kicking in. Analysts estimate the company will report earnings per share (EPS) of $2.72, according to Bloomberg estimates.

Financial institutions have significantly lagged the broader market for a year now amid concerns about US banks’ relations with Russia and fears of an economic slowdown. at Recent annual letter to shareholdersJamie Dimon, CEO of JPMorgan, warned that the bank is in a position to lose up to $1 billion over time as a result of the war.

Although the main bank said it was not concerned about its direct exposure to Russia, the institution was concerned about the “secondary and implicit effects” of the crisis and the sanctions it is imposing on many companies and countries.

JPMorgan shares are down slightly in intraday trading by 0.3% to $132.64 a piece as of 12:37 PM ET. The stock is down 15.8% year-to-date.

12:18PM ET: Lululemon Rises After Expanding Trade and Resale Program

Stocks of sports apparel retailer Lululemon (lulu) surged as much as 6% to its highest intraday level since Jan. 3 after announcing that the company would expand its “Lululemon Like New” trade and resale program nationwide.

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Lululemon Like New will be available to customers across the US beginning Earth Day, April 22 after a successful two-country trial in 2021. The retailer will reinvest 100% of profits to support Impact’s agenda, including making 100% of products sustainable materials and end-of-use by 2030.

LULU is up 4.4% at $384.80 a share as of 12:14 PM ET, likely buoyed by the latest update in the broader markets after CPI data came in less sharp than expected, with the core number showing slightly lower numbers Agreed.

The S&P 1500 consumer discretionary index rose 2.4%.

9:30 a.m. ET: Stocks move forward despite report showing hyperinflation in March

Here are the main moves in the markets during the opening bell on Tuesday:

8:35 a.m. ET: March CPI rose more-than-expected 8.5% year-over-year

Consumers in the United States I paid more for a variety of goods and services in March Compared to the previous month as price levels across the economy continued to accelerate amid continued supply and demand disruptions.

The Bureau of Labor Statistics (BLS) Consumer Price Index (CPI) rose 8.5% in March compared to the same month last year, according to its latest report released Tuesday. It was the fastest rise since December 1981, and it followed a 7.9% annual increase in February. Heading into the report, economists had been expecting a jump of 8.4% for the month of March, according to Bloomberg data.

With definitive signs of peak inflation yet to be seen in inflation, Federal Reserve members have stepped up their rhetoric about using monetary policy tools to bring down fast-rising rates. Last week, Fed Governor Lyle Brainard said the inflation cut was “Our most important task”, While Mary Daley, President of the Federal Reserve Bank of San Francisco, said that high inflation was “As harmful as not getting a job.

7:10 a.m. ET: S&P 500, Dow and Nasdaq contracts hold steady as investors await CPI print

Here’s how the major indices are performing in futures trading before the opening bell on Tuesday:

  • S&P 500 futures contracts (ES = F.): +1.25 points (+0.03%) to 4,410.25

  • Dow futures contractsYM = F.): -1.00 points (-0.00%) to 34218.00

  • Nasdaq futures contractsNQ = F.): + 14.25 points (+ 0.10%) to 14014.25

  • raw (CL = F.): +3.81 dollars (+4.04%) to 98.10 dollars per barrel

  • He went (GC = F.): +10.30 USD (+0.53%) to 1958.50 USD per ounce

  • Treasury for 10 years (^ degeneration): +0.00 basis points to produce 2.7800%

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6:40 a.m. ET: Small business sentiment drops in US as inflation fears rise

levels of trust between Small business owners dwindled across the country in MarchA survey released on Tuesday showed that more small and medium-sized store operators reported inflation as their single most important concern.

The National Federation of Independent Business said its Small Business Optimism Index fell 2.4 points to 93.2 last month, marking the third consecutive month of readings below the 48-year average of 98. The index has fallen every month this year so far.

Of respondents, 31% identified inflation as the single most important problem, up 5 points from the February survey. This number is the largest percentage of respondents who cited inflation as their biggest concern since the first quarter of 1981, also replacing concerns about “labor quality” as the number one problem facing small businesses.

High inflation caused by shortages, massive fiscal stimulus and low interest rates have pressured the economy in recent months.

6:10PM ET Monday: Little change in stock futures ahead of Tuesday’s inflation data

Here is where the markets were trading before the evening session on Monday:

  • S&P 500 futures contracts (ES = F.): +2.75 points (+0.06%) to 4,411.75

  • Dow futures contractsYM = F.): +29.00 points (+0.08%) to 34248.00

  • Nasdaq futures contractsNQ = F.): +9.75 points (+0.07%) to 14,009.75

  • raw (CL = F.): +0.97 dollars (+1.03%) to 95.26 dollars per barrel

  • He went (GC = F.): +9.30 USD (+0.48%) to 1957.50 USD per ounce

  • Treasury for 10 years (^ degeneration): +6.7 basis points to produce 2.780%

A trader works on the trading floor of the New York Stock Exchange (NYSE) in Manhattan, New York City, US, April 11, 2022. REUTERS/Andrew Kelly

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed

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