US stocks were set to open sharply lower Wednesday after a key inflation report showed an unexpected uptick in consumer prices last month.
Futures on the Dow Jones Industrial Average (^DJI) fell over 1%, while those on S&P 500 (^GSPC) and the tech-heavy Nasdaq 100 (^NDX) were both down over 1.25%.
Meanwhile, bond yields soared. The 10-year Treasury yield (^TNX) rose as much as 14 basis points Wednesday morning, touching above 4.5% for the first time in 2024.
The Consumer Price Index (CPI) rose 0.4% over the previous month and 3.5% over the prior year in March, an acceleration from February’s 3.2% annual gain in prices.
Both measures came in ahead of economist forecasts of a 0.3% month-over-month increase and a 3.4% annual increase, according to data from Bloomberg.
The hotter-than-expected print could fuel investors to expect fewer rate cuts from the Fed this year. According to the CME FedWatch tool, around 75% of bets are now on the Fed holding steady at current rate levels in June. More than half of investors also expect the central bank to hold steady through its July meeting.
Still on deck Wednesday are the minutes from the Fed’s meeting in March, likely to be highly scrutinized for any hints of crumbling in policymakers’ expectations for rate cuts.
First-quarter earnings season kicked off with results from Delta (DAL), in focus as the airline industry grapples with the fallout from Boeing’s (BA) ongoing troubles. Shares in the carrier popped almost 5% in premarket after its earnings topped expectations.
That sets the stage for reports on Friday from big Wall Street banks, whose profits aren’t expected to dazzle even as Wall Street looks for a bumper season.
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Inflation hotter than expected in March
The Consumer Price Index (CPI) rose 0.4% over the previous month and 3.5% over the prior year in March, an acceleration from February’s 3.2% annual gain in prices.
Both measures came in ahead of economist forecasts of a 0.3% month-over-month increase and a 3.4% annual increase, according to data from Bloomberg.
Futures tied to the three major indexes fell about 1% on the news.
If companies are clamping down on spending ahead of the election…
Said clampdown isn’t appearing in travel budgets as seen from results out of Delta (DAL) this morning.
Delta said managed corporate sales grew 14% year over year in the first quarter. Particular strength was seen in “large” corporate accounts, which bodes well for earnings out of key Delta partner American Express (AXP) in a few weeks.
“We have seen some real strong demand,” Delta Air CEO Ed Bastian told Yahoo Finance anchor Brad Smith. “That momentum has continued internationally. It’s continued domestically. … Year to date, we’ve seen the 11 highest sales days in our company’s history. That’s a strong predictor that the spring and summer season is going to be quite healthy on the travel side.”
Nvidia weakness persists
More folks should be talking about the weakness in market leader Nvidia (NVDA).
The stock slipped below the 50-day moving average earlier this month (see below chart) and has stayed beneath that key momentum line since. Shares are off by almost 6% in April compared to a slight decline for the S&P 500.
A sign of a rough patch ahead for markets this summer? Maybe, this stock has been the leader for the bull market for well over a year after all! So if it’s not leading, something may be off in the distance concern wise for investors.
Down goes market leader Nvidia. (Yahoo Finance)
Date save for crypto investing fans
JP Morgan strategists are out this morning saying the next bitcoin halving is slated to take place on April 16.
In case you forgot, here is Yahoo Finance anchor Brad Smith explaining precisely what a bitcoin halving is and what it could mean to the crypto.
The JP Morgan team also served up a few good charts to get you thinking on the bitcoin mining outlook, with the process potentially being a catalyst for more price gains.
More bitcoin halving events are in the cards. (JP Morgan)
The near-term bitcoin mining outlook. (JP Morgan)
Here’s a markets stat to get your day started right
Remember when the market was going up almost every single day in March?
Not the case in April so far, and the losing ways are beginning to pile up.
The S&P 500 has now gone seven consecutive sessions without a new record, points out the strategy team at Deutsche Bank this morning. That marks the longest period without an all-time high since January, back when the S&P 500 surpassed its 2022 peak.
The next streak to be broken…the S&P 500 is currently on a run of five consecutive monthly gains dating back to November.
We Are/DigitalVision via Getty Images Atlanticus Holdings (NASDAQ:ATLC) is a niche consumer lending company that specializes in providing financial solutions […]
