Shares are rising again as investors weigh in on new inflation data

U.S. stocks plunged in the last hour of trading as investors assessed new inflation data from Washington, which pushed prices up further to a new 40-year high in March.

The S&P 500 fell 0.2% and ticked below the Dow Flatline. The Nasdaq compound stumbled after jumping into an earlier session. Meanwhile, treasury yields were slightly lower, but the 10-year yield was above 2.7%, the highest level since January 2019.

The moves on Wall Street follow the start of the week marked by concerns about a recession such as the war in Ukraine and the lockout of the Govt-19 in China and a more aggressive Federal Reserve outlook. Investors are looking forward to the start of the earnings season and additional economic data for the release of this holiday-short trading week.

Markets weigh the latest level of inflation in the US, with the Consumer Price Index (CPI) of the Labor Statistics Office (BLS) rising 8.5% in March. This figure represents the fastest growth since December 1981 and follows an annual increase of 7.9% in February. According to Bloomberg data, consensus economists expect 8.4% growth in March.

The red-hot axis comes just minutes after “several” policymakers at last week’s central bank meeting in March suggested a “50-point increase” and the possibility that central bank officials would act more aggressively to combat inflation. At benchmark interest rates last month.

“I think the federal government is already firmly on the rise,” Charles Schwab’s chief global investment strategist Jeffrey Kleintop told Yahoo Finance Live on Monday. CPI data on Tuesday “will not have that much of an impact [on the markets] Let’s say a few months ago.

While investors are largely prepared for the possibility that Fed policymakers will fight back in their efforts to combat inflation, concerns have been raised that an increase in monetary tightness could lead to an economic contraction. Strategists have begun to discuss in detail the possibility of a recession in recent weeks, especially as economists at Deutsche Bank recently warned that central bank activity could slow growth in the second half of 2023.

Some have said that making such a call is very soon but possible at the table.

“I would say that by the end of this year the economy will be moving closer to recession, very close to the currency cycle,” said Vince Reinhart, chief economist at Trophus and Mellon and macro strategist at Yahoo Finance Live.

12:39 pm ET: JPMorgan shares are down nearly 16% from year to year

JPMorgan is the first mega bank to release its first quarterly results on Wednesday. According to Bloomberg Consensus, analysts estimate the company’s earnings per share (EPS) at $ 2.72.

Amid concerns about US banking relations with Russia and the recession, the financial broader market has lagged meaningfully from year to date. In his latest annual letter to shareholders, JPMorgan CEO Jamie Timon warned that the war could result in the loss of up to $ 1 billion over time.

While the big bank has said it is not concerned about direct exposure to Russia, the company is concerned about the “secondary and side effects” of the crisis and sanctions on many companies and countries.

Shares of JP Morgan traded down 0.3% at $ 132.64 in intraday trading, up 12:37 pm ET. The stock is down 15.8% year-on-year.

12:18 pm and: Lulu Lemon climbs after expansion of trade and resale program

Shares of athletics apparel retailer Lululemon (LULU) have risen as much as 6% since January 3, following the announcement that the company will expand its business and resell its “Lululemon Like New” plan nationwide.

Lululemon Like New will be available to customers across the United States on Earth Day, April 22, after a successful two-state pilot in 2021. The retailer will reinvest 100% of the profits in support of its offensive agenda, including making 100% of the products sustainable. Materials and utility solutions by 2030.

LULU 12:14 pm ET was up 4.4% at $ 384.80 a share, after CPI data came in lower than expected and may be boosted by an update date in broader markets, with the key figure falling below consensus numbers.

The S&P 1500 consumer preference index rose 2.4%.

9:30 am ET: Shares move up despite red-hot inflation report in March

Here are the key moves in the markets during the opening hours on Tuesday:

  • S&P 500 (GSPC): +28.07 (+ 0.64%) to 4,440.60

  • Dove (DJI): +100.67 (+ 0.29%) to 34,408.75

  • Nasdaq (IXIC): +162.91 (+ 1.21%) to 13,574.87

  • RawCL = F): + $ 4.36 (+ 4.62%) to $ 98.65 a barrel

  • Gold (GC = F): + $ 25.20 (+ 1.29%) to $ 1,973.40 per ounce

  • 10 year treasury (DNX): -6.1 bps 2.7190% Yield

8:35 am and: March CBI 8.5% higher than expected last year

U.S. consumers paid higher prices for a variety of goods and services in March compared to the previous month as price levels throughout the economy continued to accelerate amid supply and demand disruptions.

According to a recent report released by the Bureau of Labor Statistics (PLS), the Consumer Price Index (CPI) rose by 8.5% in March compared to the same month last year. This marks the fastest rise since December 1981. This was followed by an annual increase of 7.9% in February. According to Bloomberg data, consensus economists expect 8.4% growth in March.

While there are no definite signs of a peak in inflation, members of the Federal Reserve have stepped up their rhetoric in using monetary policy tools to curb rapidly rising prices. Last week, Central Bank Governor Lale Brinard said reducing inflation was “our most important task”, while San Francisco Central Bank President Mary Daly said high inflation was “as harmful as unemployment.”

7:10 am and: Deals on S&P 500, Dow and Nasdaq flats while investors wait for the CPI axis

Here’s how key indices work in futures trading ahead of Tuesday’s opening:

  • S&P 500 Futures (ES = F): +1.25 points (+ 0.03%) to 4,410.25

  • Dow Futures (YM = F): -1.00 points (-0.00%) to 34,218.00

  • Nasdaq Futures (NQ = F): +14.25 points (+ 0.10%) to 14,014.25

  • RawCL = F): + $ 3.81 (+ 4.04%) to $ 98.10 a barrel

  • Gold (GC = F): + $ 10.30 (+ 0.53%) to $ 1,958.50 per ounce

  • 10 year treasury (DNX): +0.00 bps to earn 2.7800%

6:40 am ET: US small business sentiment declines as inflation rises

Confidence levels among small business owners across the country fell further in March, and a large number of mom and pop-shop operators declared inflation as their most important concern, a survey on Tuesday shows.

The National Federation of Independent Businesses said its small business confidence index was down 2.4 points at 93.2 last month, its third consecutive monthly reading below the 48-year average of 98.

Of those who responded, 31% identified inflation as their most important problem, up 5 points from the February survey. This figure is the largest share of participants who have referred to inflation as their biggest concern since the first quarter of 1981, and shifting concerns about “labor quality” to the first problem facing small businesses.

High inflation, massive fiscal stimulus and low interest rates caused by the deficit have been squeezing the economy in recent months.

6:10 pm and Monday: Stock futures change slightly ahead of Tuesday’s inflation data

Here is where the markets will trade before Monday night’s session:

  • S&P 500 Futures (ES = F): +2.75 points (+ 0.06%) to 4,411.75

  • Dow Futures (YM = F): +29.00 points (+ 0.08%) to 34,248.00

  • Nasdaq Futures (NQ = F): +9.75 points (+ 0.07%) to 14,009.75

  • RawCL = F): + $ 0.97 (+ 1.03%) to $ 95.26 a barrel

  • Gold (GC = F): + $ 9.30 (+ 0.48%) to $ 1,957.50 per ounce

  • 10 year treasury (DNX): +6.7 bps to earn 2.7800%

A trader works on the New York Stock Exchange (NYSE) trading platform in Manhattan, New York, USA on April 11, 2022. REUTERS / Andrew Kelly

Alexandra Semanova is a Yahoo Finance correspondent. Follow her on Twitter @alexandraandnyc

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