US stocks trade mixed as investors assess cooler April inflation data
- US stocks end mixed on Wednesday after the release of April inflation data.
- Inflation cooled to 4.9%, below expectations of a 5% rate.
US stocks ended Wednesday's session mixed, with tech stocks fired up by cooling in inflation in April while the Dow Jones Industrial Average displayed concerned about recession risks for the world's largest economy.
The tech-concentrated Nasdaq Composite jumped as the Consumer Price Index for April spurred stronger expectations the Federal Reserve will pause or end its rate-hike campaign with consumer price pressures easing. Higher interest rates eat into future profit made by growth companies.
CPI increased to 4.9% annually, the lowest reading since May 2021. The result was below expectations of 5%. Core CPI rose to 5.5%, meeting expectations.
But the Dow, which carries many bank and consumer-oriented stocks, felt the weight of investors' concerns about the economy moving into a recession.
Here's where US indexes stood at the 4:00 p.m. closing bell on Wednesday:
- S&P 500: 4,137.64, up 0.45%
- Dow Jones Industrial Average: 33,531.33, down 0.09% (30.48 points)
- Nasdaq Composite: 12,306.44, up 1.04%
"The market outlook is a function of how growth and inflation evolve over the next few quarters. Equities are pricing for the downward paths in both variables to be fairly smooth," Jason Draho, head of asset allocation in the Americas at UBS Global Wealth Management, said in a note.
"But with soft- and hard-landings still both in play, the market narrative will jump around based on incoming data shifting the probabilities between the two scenarios. This implies continued range-bound markets that lack consistent direction until something breaks, either positively or negatively," he said.
Here's what else is happening today:
- A stock picker's market is forming for the first time since 2008 as investors ditch ETFs and pile into single shares, says Bank of America.
- The dollar is at "real risk" as the US debt-ceiling deadlock undermines investor confidence, says the co-head of global financing at Goldman Sachs.
- Airbnb shares drop as execs warn of a potential booking slowdown in the second quarter.
- Commercial real estate lending plunged 56% last quarter.
- Billionaire crypto bull Mike Novogratz said Galaxy Digital will move more operations offshore because of a "regulatory headache" in the US.
- Billionaire investor Stanley Druckenmiller is ringing the alarm on an imminent recession.
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