The Dow Jones Industrial Average was off its lows, it remained in the red as inflation fears grew. The Nasdaq was the hardest hit, as bears pounced on tech stocks like Nvidia (NVDA), Microsoft (MSFT), and Apple (AAPL). Meanwhile, a senior Federal Reserve official discussed the central bank’s approach to inflation.
During Wednesday’s regular session, U.S. stocks fell, led by technology stocks, as key inflation data revealed higher-than-expected price pressures.
The Dow Jones Industrial Average fell 681 points, or 1.99 percent, in its single-worst session since January. On Tuesday, the blue-chip index had its worst day since February. The S&P 500 fell 2.1 percent, the most in a single day since February, while the Nasdaq Composite fell 2.6 percent.
The consumer price index increased 4.2 percent year over year, according to the Labour Department. This was higher than the 3.6 percent rise predicted by economists. Inflation was also at its highest level since September 2008.
The core CPI, which excludes volatile food and energy categories, increased 0.9 percent in March, compared to a 0.3 percent increase anticipated. It was the most significant monthly rise since April 1982. The yield on the 10-year Treasury note rose sharply to 1.69 percent. The 10-year Treasury yield was 1.62 percent late Tuesday.
Vice Chairman Richard Clarida of the Federal Reserve said he was “surprised” by the magnitude of the CPI increase and that the central bank would take action to prevent inflation from spiraling out of control.
The Nasdaq was the worst-affected index, with tech stocks dropping nearly 2%. Chip equipment stock, Applied Materials (AMAT) and security software company Okta (OKTA) were the biggest laggards, both dropping over 5%. Seagen (SGEN), a biotechnology portfolio, was a bright spot, growing nearly 5%.
The S&P sectors were largely in the red, with technology and consumer sectors lagging the most. The only bright spot was the energy market.
On a down day, volume was lower, which is a positive indication. On the New York Stock Exchange, it was down 15% from Tuesday at the same time. On the day, trading was down about 13%.
For the time being, the commodity market’s momentum seems to have slowed and concerns about the effect of inflation on the global growth outlook halted copper’s advance. Oil fell back to $65 a barrel as the nation’s largest gasoline pipeline reopened after a cyberattack that caused severe fuel shortages.