4.02pm: Dow Jones down 500 points
US stocks closed with a sharp decline after the higher-than-expected inflation data, amid fears of Federal Reserve monetary rate hike as early as March.
All three major indices bore acute losses, with the Dow Jones Industrial Average shedding more than 500 points, or 1.5%, closing at 35,192, while the broader S&P 500 lost 1.8%, and the Nasdaq Composite was down by 2.1%.
Some of the big tech stocks hit by the market pressure include Microsoft and Adobe, both slipping by 3% and 5%, respectively.
Meanwhile, weekly jobless claims were recorded a little below expectations, at 223,000.
12.05pm: Markets lower amid inflation data
US stocks, although in losses, recovered from the sharp early-morning decline as the decades-high key inflation report added to the volatility amid fears of rate hikes by the Federal Reserve – expected as early as next month.
At noon, the Dow Jones Industrial Average dropped 0.2%, or 80 points, at 35,687, while the S&P 500 and the Nasdaq Composite both shed 0.3%.
“The latest reading on US inflation delivered a brief check to the rebound in US markets, but it was unable to push indices lower for an extended period,” noted Chris Beauchamp, chief market analyst at online trading platform IG.
Danni Hewson, AJ Bell financial analyst, added: "It’s unlikely anyone is placing a bet that US interest rates won’t rise in March, in fact the topic of debate is now centred on exactly how high that rate hike will go.
"Perhaps it’s that uncertainty that has led to further sell-offs of those big tech stocks today, indicating investors aren’t quite done trying to inflation-proof their portfolios.
"There are two obvious standouts in the form of Disney and Twitter, the former writing quite the fairy-tale in its latest results and the latter charming the market with share buyback plans which seem to indicate a change in direction for the business from the new man at the top."
Shares of Disney surged by almost 5% after the mouse company posted its quarterly earnings late Wednesday.
Meanwhile, the social media platform delivered a jump in daily users over the last quarter and revenues that were just shy of expectations and showed it had been pretty resilient when faced with Apple’s privacy changes, a marked difference to the tone delivered by Meta last week.
Twitter continued to trade in the green post its corporate earnings, with a gain of almost 1%.
11.30am: Proactive North America headlines:
Predictmedix highlights transformational growth and key achievements as it reviews 2021
Canaccord Genuity (TSX:CF, LSE:CF) happy with Silvercorp Metals 3Q results, citing strong margins, healthy balance sheet as catalysts for 'Buy' rating
ME2C Environmental (OTCQB:MEEC) wins new supply business at another Midwest plant operated by large utility customer
Empower Clinics strikes partnership with one of North America's largest terminal operators to provide COVID-19 testing services
Thunderbird Entertainment appoints industry veteran Lana Castleman as its new marketing and communications director
Ridgeline Minerals (TSX-V:RDG, OTCQB:RDGMF) set for 5,500 metre drill program at flagship Selena project, Nevada
Kovo HealthTech and HybridChart announce strategic partnership
Electra Battery Materials wins key permit for its Ontario refinery
Alpine 4 Holdings says subsidiary Vayu has successfully incorporated solid-state batteries into its Autonomous G1 Drone
Dalrada names Dr Aboo Nasar as medical director of Sòlas Rejuvenation + Wellness center in San Diego
Recruiter.com says Recruiter Index for January reveals candidates continue to prefer remote working
The Valens Company (TSX:VLNS, OTCQX:VLNCF) ships first batch of beverages from its Greater Toronto Area manufacturing facility; inks beverage manufacturing partnership
SPYR (OTCQB:SPYR) Technologies subsidiary Applied Magix expanding the airing schedule of its MagixDrive national commercial
Snowline Gold announces more positive drill assays from Valley bulk-tonnage gold target at Rogue project
Biocept appoints Darrell Taylor as its new chief compliance officer
Cypress Development completes two-week lithium extraction test at Nevada pilot plant
Globex Mining says Excellon reports intersections of silver, lead, and zinc at Silver City project in Germany
Los Andes Copper reports encouraging assays from its Phase I drill program at the Vizcachitas copper project in Chile
New Pacific Metals (TSX:NUAG, NYSE:NEWP) encouraged by last year's discovery drill program at Carangas project in Bolivia
SpotLite360 announces private placement to raise up to $3M
BetterLife Pharma launches its new corporate website
Cabral Gold continues its high-grade gold run at the Central target on its Cuiú Cuiú project in Brazil
GR Silver Mining (TSX-V:GRSL) hits high-grade gold and silver at its Plomosas project in Mexico
G Mining Ventures (TSX-V:GMIN) delivers new robust feasibility study for its Tocantinzinho gold project in Brazil
Plurilock says Aurora Systems receives US$304,000 purchase order from California state utility organization
Vox receives first royalty payment from Segilola Gold project
Victory Resources starts drilling at Smokey lithium property in Nevada
BioVaxys Technology closes first tranche of C$1M non-brokered private placement
Soma Gold set for 20,000 metres of drilling at Colombia properties this year as it unveils second phase of five year plan
Gungnir identifies twin conductor at Lappvattnet nickel project in Sweden
Else Nutrition appoints pediatric gastroenterology and nutrition expert Dr Carlos Lifschitz to its scientific advisory board
CULT Food Science makes donation to support New Harvest's cellular agriculture research
Agra Ventures records up to $491,000 in wholesale cannabis revenue in the past two months
AMPD Ventures closes C$1.1M technology sale to leading digital media firm
10.00am: US markets tremble
The US benchmarks opened in the red after fresh economic data highlighted inflationary pressure—the highest in four decades—while pushing the benchmark 10-year Treasury yield above 2%.
In New York, the Dow Jones Industrial Average shed 0.4%, or 136 points, at 35,632, while the S&P 500 and the tech-laden Nasdaq Composite lost 0.8% and 1.3%, respectively.
The latest Consumer Price Index report showed that year-over-year inflation jumped to 7.5%, the highest since 1982.
“Prior to today’s inflation report, bets had risen to a one-in-three chance of a 50-basis-point hike, which would be the first since 2000,” said Fawad Razaqzada, market analyst at Think Markets. “Well, you can safely assume that those bets have been ramped up even further now.”
“For what it is worth, I don’t think we will see the Fed hiking by half a percentage point, but today’s 7.5% CPI print does put a lot of pressure on the Fed to walk the walk in terms of tightening, having done the talking,” he added.
The analyst said that five rate increases for 2022 “is a real possibility now.”
6.30am: US stocks seen opening up
US stocks are expected to open mostly lower as investors await inflation data, due for release before the start of trade, that is likely to show consumer price increases remain at multi-decade highs.
Futures for the Dow Jones Industrial Average rose 0.19% in Thursday pre-market trading, but those for the broader S&P 500 index shed 0.09% and the tech-heavy Nasdaq 100 declined 0.28%.
Markets closed higher on Wednesday, led by gains on the Nasdaq, as investors responded positively to corporate earnings reports. Disney jumped nearly 7% after hours as it added nearly 12 million new quarterly subscribers at Disney+, beating market expectations.
The Nasdaq Composite closed 2.08% up at 14,490, while the S&P 500 gained 1.45% to 4,587 and the Dow Jones Average added 0.86% to 35,768.
US consumer price data are expected to show that prices climbed 7.3% year-over-year in January, according to a Reuters poll of economists. The consumer price index climbed 7% in December, the biggest year-on-year increase since June 1982.
“The pre-CPI rally in the US stocks suggests that the hawkish Federal Reserve (Fed) expectations have been broadly priced in and that the perception that the worst reaction to the Fed rate hikes is mostly done,” commented Ipek Ozkardeskaya, senior analyst at Swissquote.
“But there is a risk that investor optimism is premature, and a stronger-than-expected inflation read could send all the recent gains crashing, as there is still room for Fed hawks to price in a tighter Fed policy.
“US equity futures are pointing to the downside at the time of writing, as the US inflation data is still a threat to the overall market mood, and could be a pivot moment for this week. Either we will see a reasonable CPI read and the equity rally could carry on, or we will see an ugly number, and the bears will run into the marketplace and destroy the recent gains."