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Wall Street closed sharply lower on Wednesday, in a broad-based slump. With inflation numbers coming in hot, investors became apprehensive about rate cuts getting delayed. Treasury yields rose significantly. All of the three major stock indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 422.16 points, or less than 1.1%, to close at 38,461.51. Twenty-two components of the 30-stock index ended in negative territory, while eight ended in positive.
The tech-heavy Nasdaq Composite lost 136.28 points, or 0.8%, to close at 16,170.36.
The S&P 500 declined 49.27 points, or 1%, to close at 5,160.64. Ten of the 11 broad sectors of the benchmark index closed in the red. The Real Estate Select Sector SPDR (XLRE), the Utilities Select Sector SPDR (XLU) and the Materials Select Sector SPDR (XLB) fell 4.1%, 1.7% and 1.6%, respectively, while the Energy Select Sector SPDR (XLE) rose 0.3%.
The fear-gauge CBOE Volatility Index (VIX) increased 5.5% to 15.80. A total of 11.9 billion shares were traded on Wednesday, higher than the last 20-session average of 11.5 billion. Decliners outnumbered advancers by a 5.93-to-1 ratio on the NYSE. On the Nasdaq, declining issues outnumbered advancing ones by a 3.58-to-1 ratio.
CPI Comes in Hotter Than Expected
The U.S. Bureau of Labor Statistics reported on Wednesday that Consumer Price Index (CPI) increased 0.4% in March on a seasonally adjusted basis, the same increase as in February. Core CPI, which excludes food and energy rices, rose 0.4%, as it did in each of the two preceding months.
Over the past few weeks, investors have eagerly awaited signals from Fed officials about when the rate cuts would start. While earlier, there was a widespread consensus about a first rate cut in June, hotter-than-expected CPI numbers from March have cast uncertainty over the timeline.
A week back, Fed officials had reiterated that they were sticking to their assessment of three rate cuts in 2024, but now market participants are not so sure. As a result, a broad-based cross-sectoral slump was witnessed in the markets during the session, with only energy bucking the trend. Markets are now pricing in a 16.5% likelihood of a 25 bps Fed rate cut in June, down from 56% just before the CPI report's release, per CME's FedWatch tool.
The U.S. 10-year Treasury yield breached the 4.5% mark on Wednesday after CPI data came in hotter than expected, boosting the likelihood that Fed rate cuts might get delayed further. The yield on the benchmark treasury closed higher by more than 18 bps at 4.548%. The yield on the 2-year treasury note was last at a 4.969% increase, after climbing 22 bps.
Economic Data
The U.S. Census Bureau reported that wholesale inventories rose 0.5% in February. The number for January was revised down to a 0.2% fall from the previously reported 0.3% fall.
Per a government report, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) for the week ended Apr 5, 2024, increased by 5.8 million barrels from the previous week. The number from the previous week remained unrevised at an increase of 3.2 million barrels.
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Stock Market News for Apr 11, 2024
Wall Street closed sharply lower on Wednesday, in a broad-based slump. With inflation numbers coming in hot, investors became apprehensive about rate cuts getting delayed. Treasury yields rose significantly. All of the three major stock indexes ended in the red.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 422.16 points, or less than 1.1%, to close at 38,461.51. Twenty-two components of the 30-stock index ended in negative territory, while eight ended in positive.
The tech-heavy Nasdaq Composite lost 136.28 points, or 0.8%, to close at 16,170.36.
The S&P 500 declined 49.27 points, or 1%, to close at 5,160.64. Ten of the 11 broad sectors of the benchmark index closed in the red. The Real Estate Select Sector SPDR (XLRE), the Utilities Select Sector SPDR (XLU) and the Materials Select Sector SPDR (XLB) fell 4.1%, 1.7% and 1.6%, respectively, while the Energy Select Sector SPDR (XLE) rose 0.3%.
The fear-gauge CBOE Volatility Index (VIX) increased 5.5% to 15.80. A total of 11.9 billion shares were traded on Wednesday, higher than the last 20-session average of 11.5 billion. Decliners outnumbered advancers by a 5.93-to-1 ratio on the NYSE. On the Nasdaq, declining issues outnumbered advancing ones by a 3.58-to-1 ratio.
CPI Comes in Hotter Than Expected
The U.S. Bureau of Labor Statistics reported on Wednesday that Consumer Price Index (CPI) increased 0.4% in March on a seasonally adjusted basis, the same increase as in February. Core CPI, which excludes food and energy rices, rose 0.4%, as it did in each of the two preceding months.
Over the past few weeks, investors have eagerly awaited signals from Fed officials about when the rate cuts would start. While earlier, there was a widespread consensus about a first rate cut in June, hotter-than-expected CPI numbers from March have cast uncertainty over the timeline.
A week back, Fed officials had reiterated that they were sticking to their assessment of three rate cuts in 2024, but now market participants are not so sure. As a result, a broad-based cross-sectoral slump was witnessed in the markets during the session, with only energy bucking the trend. Markets are now pricing in a 16.5% likelihood of a 25 bps Fed rate cut in June, down from 56% just before the CPI report's release, per CME's FedWatch tool.
Consequently, shares of Boston Properties, Inc. (BXP - Free Report) and Walgreens Boots Alliance, Inc. (WBA - Free Report) fell 6.1% each. Both currently carry a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
10-Year Treasury Yield Shoots Up
The U.S. 10-year Treasury yield breached the 4.5% mark on Wednesday after CPI data came in hotter than expected, boosting the likelihood that Fed rate cuts might get delayed further. The yield on the benchmark treasury closed higher by more than 18 bps at 4.548%. The yield on the 2-year treasury note was last at a 4.969% increase, after climbing 22 bps.
Economic Data
The U.S. Census Bureau reported that wholesale inventories rose 0.5% in February. The number for January was revised down to a 0.2% fall from the previously reported 0.3% fall.
Per a government report, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) for the week ended Apr 5, 2024, increased by 5.8 million barrels from the previous week. The number from the previous week remained unrevised at an increase of 3.2 million barrels.