Market Snapshot: U.S. stocks slide as January inflation surge sees 10-year Treasury yield touch 2%

U.S. stock indexes fell Thursday after data showed U.S. inflation accelerated in January, prompting fears the Federal Reserve will be more aggressive in tightening monetary policy.

How are stock-index futures trading?

The Dow Jones Industrial Average DJIA, -0.15% was down 104 points, or 0.3%, at 35,664.
The S&P 500 SPX, -0.35% shed 0.5% to 4,563.
The Nasdaq Composite COMP, -0.51% was down 100 poitns, or 0.7% at 14,390.

The Dow industrials rose 0.9% on Wednesday, with the S&P 500 gaining 1.5% and the Nasdaq jumping 2.1%, marking its best daily percentage gain since Jan. 31, according to Dow Jones Market Data.

What’s driving the markets?

Stocks fell swiftly on the inflation data, then bounced off early session lows, but remained under pressure. The year-over-year rate of U.S. inflation climbed again in January to 7.5% and stayed at a 40-year high, suggesting upward pressure on consumer prices is unlikely to relent in the near future. On a monthly basis, the consumer-price index rose 0.6% in January. Economists polled by The Wall Street Journal had forecast a 0.4% gain.

Inflation “was piping hot and now there are greater chances for the Fed to adopt more aggressive policy. In fact, our base case scenario is that by July we may see a full percentage point increase in the interest rate,” said Naeem Aslam, chief market analyst at AvaTrade, in a note. “Equity traders are not going to like today’s number.”

And: High inflation has jacked up the cost of food, gas, cars and rent – and there’s little relief in sight

Treasury yields jumped, with the 10-year Treasury note TMUBMUSD10Y, 1.991% briefly topping the 2% threshold for the first time since 2019.

The higher-than-expected inflation number could pile pressure particularly on interest-rate sensitive technology stocks. The Nasdaq Composite suffered its biggest percentage drop in almost two years last month, as well as its worst January in over a decade due to worries over inflation and tighter Federal Reserve monetary policy.

In other data, jobless claims fell 16,000 in latest week to 223,000.

What companies are in focus?

Disney shares DIS, +5.47% climbed after the entertainment giant reported record revenue and a profit of more than $1 billion as it added streaming subscribers than expected over the holidays, theme-park profit surged.
Shares of Coca-Cola Co. KO, +1.54% were up 0.8% after the beverage giant delivered results that topped expectations and saw sales rise.
Twitter Inc. TWTR, +0.78% shares rose 2.7% after results largely met expectations and the social media company announced a new $4 billion buyback program.
Twillio Inc. TWLO, +12.12% shares were up after the cloud communication software group posted a strong outlook and earnings and sales that shot past Wall Street estimates.
Uber Technologies Inc. UBER stock rose as the ride-share operator reported forecast-beating profit and sales.

How are other assets trading?

The ICE U.S. Dollar Index DXY, +0.04%, a measure of the currency against a basket of six major rivals, rose 0.3%.
West Texas Intermediate crude for March delivery CL.1, +1.84% CLH22, +1.84%  rose 0.6% to $90.15 a barrel. Gold futures for April delivery  GC00, +0.02% GCJ22, +0.02% slipped 0.4%.
Bitcoin BTCUSD, +0.61% fell 1.1%.
The Stoxx 600 Europe  SXXP, -0.08% fell 0.4%, while the FTSE 100  UKX, +0.40%  gained 0.1%.
The Shanghai Composite  SHCOMP, +0.17%  rose 0.1%, while the Hang Seng Index  HSI, +0.38% gained 0.3% and Japan’s Nikkei 225  NIK, +0.42% rose 0.4%.

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