Nasdaq fell more than 3% as US inflation data gives investors little comfort

NEW YORK (Reuters) – U.S. stocks closed sharply lower on Wednesday, with the Nasdaq down more than 3% and the Dow Jones down for a fifth straight day after U.S. inflation data did little to allay investor concerns about interest rate expectations. And the economy.

The benchmark S&P 500 lost 1.7% and is now 18% lower from its record closing high on January 3.

The Labor Department’s monthly CPI report indicated that inflation may have peaked in April but is likely to remain strong enough to keep the Federal Reserve’s foot on the brakes to cool demand. Read more

The consumer price index rose 0.3 percent last month, the smallest rise since last August, while economists polled by Reuters expected consumer prices to rise 0.2 percent in April.

“It didn’t dispel the idea that there was more that needed to be done in terms of curbing inflation,” said Quincy Crosby, chief equity strategist at LBL Financial in Charlotte, North Carolina.

“The market is trying to understand if we will also see slower growth than expected” while the Fed raises interest rates, she said.

apple (AAPL.O) Shares fell 5.2% and were the most heavily weighted on the Nasdaq and S&P 500 indexes.

“There’s a lot of focus right now on Apple,” Crosby said. “Because of its weight, Apple is a market leader in many ways.”

Investors’ concerns about whether the Fed will continue to raise interest rates aggressively has hurt growth stocks in particular. Consumer discretion (.SPLRCD) and technology (.SPLRCT)Sectors fell about 3% each, dragging the S&P 500 sector down.

Dow Jones Industrial Average (.DJI) The index fell 326.63 points, or 1.02%, to 31,834.11 points, the Standard & Poor’s 500 (.SPX) It lost 65.87 points, or 1.65%, to 3935.18 points, and the Nasdaq Composite (nineteenth) It fell 373.44 points, or 3.18%, to 11,364.24 points.

The Dow’s five-day drop was its longest losing streak since mid-February.

energy (.SPNY) Stocks closed higher and helped cap some declines in the S&P 500 and Dow. Exxon Mobil Corporation (XOM.N) Shares rose 2.1%.

The value outweighed the growth shares overall. Standard & Poor’s Growth Index (.IGX) It’s down 2.8% on the day versus a 0.5% drop in the S&P . value index (.IVX).

Investors are eager to see more data on inflation on Thursday, when the US Producer Price Index data is due.

Stocks have fallen this year after concerns about rates, as well as the Ukraine war and recent coronavirus lockdowns in China.

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Volume on US exchanges was 15.38 billion shares, compared to an average of 12.75 billion for the full session over the last 20 trading days.

Low issues outnumbered advanced issues on the New York Stock Exchange by 2.16 to 1; On the Nasdaq, the ratio was 3.70 to 1 in favor of declining stocks.

S&P 500 set a new 52-week high and 67 new low; The Nasdaq recorded 10 new highs and 1,221 new lows.

Reporting by Caroline Valitkevich. Additional reporting by Amruta Khandekar and Devik Jain in Bengaluru and Sinad Karo in New York. Editing by Aaron Coeur and Aurora Ellis

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