Wall Street falls at close as concerns escalate ahead of CPI report

  • Treasuries yield inversion raises recession fears
  • Boeing jumps, deliveries reach monthly high in 3 years
  • Gap slips on CEO exit, expectations
  • Indices down: Dow 0.62%, Standard & Poor’s 0.92%, Nasdaq 0.95%.

NEW YORK (Reuters) – Wall Street closed in negative territory on Tuesday as mounting recession indicators drove buyers away from the stock market ahead of inflation data.

While all three major US stock indexes oscillated between modest gains and losses earlier in the session, they turned sharply late in the day as Wednesday’s consumer price report approaches the Labor Department, with big bank earnings due later in the week. .

“(Investors) are waiting to hear what happens with CPI and earnings,” said Brent Schott, chief investment officer at Northwestern Mutual Wealth Management Company, in Milwaukee, Wisconsin. “For months we have been swinging back and forth between inflation fears and recession fears, on an almost daily basis.”

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“We really confused investors who chose to strike off buyers,” Schott added. “I don’t hear a lot of people saying ‘Buy the snorkel.'” “

While the CPI report is expected to show that inflation increased in June, the so-called “core” CPI, which removes fluctuations in food and energy prices, is seen as providing additional confirmation that inflation has peaked, causing He may persuade the Federal Reserve to ease policy tightening in the fall.

Paul Kim, CEO of Simplify ETFs in New York, expects the year-over-year CPI to be “in the eight or nine percentage point range, and with inflation soaring, the Fed has only one thing in mind.”

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Fears that excessively aggressive moves by the Federal Reserve to control decades of high inflation could push the economy to the brink of recession have been exacerbated by the sharp reversal in two- and 10-year Treasury yields since at least March 2010, a possible signal close. – Risks of term and economic downturn.

The market expects the central bank to raise its key Fed funds target rate by 75 basis points at the conclusion of its July policy meeting, which will mark the third consecutive rate hike.

Dow Jones Industrial Average (.DJI) The index fell 192.51 points, or 0.62%, to 30,981.33 points, the Standard & Poor’s 500 (.SPX) It lost 35.63 points, or 0.92%, to 3,818.8 points, and the Nasdaq Composite (nineteenth) It fell 107.87 points, or 0.95%, to 11,264.73 points.

All 11 major sectors in the S&P 500 fell, with energy stocks (.SPNY)affected by the decline in crude oil prices, incurring the largest percentage loss.

The reporting season for the second quarter will take a full step up later in the week, with results for JPMorgan Chase & Co., Morgan Stanley, Citigroup and Wells Fargo & Co. coming out.

As of Friday, analysts saw S&P annual aggregate earnings growth of 5.7% for the April-June period, down from expectations of 6.8% at the start of the quarter, according to Refinitiv.

PepsiCo grabbed the ball this week by beating its quarterly earnings estimates and announcing that it may raise prices amid resilient demand. Read more

Shares of Boeing Co jumped 7.4% after the aircraft maker’s shipments in June reached the highest monthly level since March 2019. Read more

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This news, along with lower energy prices, helped the S&P 1500 Air Lines index (.SPCOMAIR) A rise of 6.1%.

Garment retailer Gap Inc (GPS.N) It fell 5.0% after announcing its CEO would step down, and that margins would remain under pressure in the second quarter due to input costs. Read more

Service Provider Software Now (NOW.N) It fell 12.7% after the CEO’s comments about overall headwinds and currency pressures. Other software companies, including Salesforce.com (CRM.N)Paycom Software (PAYC.N)intuit (INTU.O) and Microsoft (MSFT.O)It was also low.

Low issues outnumbered advanced issues on the New York Stock Exchange by 1.37 to 1; On the Nasdaq, the ratio was 1.19 to 1 in favor of declining stocks.

The S&P 500 hit a new 52-week high and 30 new low; The Nasdaq Composite recorded 13 new highs and 145 new lows.

Volume on US stock exchanges reached 9.86 billion shares, compared to an average of 12.79 billion over the last 20 trading days.

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Stephen Kolb reports. Additional reporting by Amruta Khandekar and Shreyachi Sanyal in Bengaluru Editing by Margarita Choi

Our criteria: Thomson Reuters Trust Principles.

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