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U.S. stock markets suffered a bloody blow on Friday after a key inflation data came in at worse than expected. Market participants remained highly concerned regarding economic slowdown and the possibility of a near-term recession. All three major stock indexes plunged on the last trading day of the week.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) tumbled 2.7% or 880 points to close at 31,392.79. Notably, 29 components of the 30-stock index ended in negative territory while just one kin green. The blue-chip index is down 13.6% year to date.
The tech-heavy Nasdaq Composite finished at 11,340.02, sliding 3.5% or 414.20 points due to the disappointing performance of large-cap technology stocks. The tech-laden index is down 27.5% year to date and is under bear market territory since March.
Meanwhile, the S&P 500 tanked 2.9% or 116.96 points to end at 3,900.86. The broad-market index is down 18.2% year to date. All 11 broad sectors of the benchmark index closed in negative zone.
The Consumer Discretionary Select Sector SPDR (XLY), the Financials Select Sector SPDR (XLF), the Materials Select Sector SPDR (XLB), the Technology Select Sector SPADR (XLK) and the Industrials Select Sector SPDR (XLC) slumped 4%, 3.6%, 3.1%, 3.8% and 3%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 6.4% to 27.75. A total of 12.62 billion shares were traded Friday, higher than the last 20-session average of 11.88 billion. Decliners outnumbered advancers on the NYSE by a 5.70-to-1 ratio. On Nasdaq, a 4.05-to-1 ratio favored declining issues.
Inflation Data Worse-Than-Expected
The Department of Labor reported that the consumer price index (CPI) – popularly known as household inflation – rose 1% in May compared with 0.3% in April. The consensus estimate was 0.7%. The core CPI (excluding volatile food and energy items) was up 0.6% in May in line with the previous month. The consensus estimate was 0.5%.
Year over year, CPI jumped 8.6% in May compared with 8.3% in April. May’s reading was the highest since December 1981. The core CPI climbed 6% year over year in May, exceeding the consensus estimate of 5.9%. However, April’s reading was 6.2%.
Gasoline prices rebounded 4.1% after falling 6.1% in April. Natural gas prices increased 0.8%, its highest since October 2005. Overall food prices were hiked by 1.2% while foods specifically used for household consumption grew 1.4%, reflecting the fifth consecutive months of increasing more than 1%. Moreover, dairy and related products registered their biggest monthly gain since July 2007.
Consumer Sentiment at Record-Low
The University of Michigan reported that the preliminary reading of the U.S. consumer sentiment drooped to 50.2% in June from 58.4% In May. The consensus estimate was 58.5%. June’s data was mostly in line with the low levels of 1980.
The gauge for current condition slid to 55.4% in June from 63.3% in May. The gauge for expectations tumbled 46.8% in June from 55.2% in May. Per the study, Americans’ are expecting overall inflation over the next year rose to 5.4% in June from 3.3% in May while for next five years, the expectation rose to 3.35 in June from 3% in May.
Weekly Roundup
Wall Street was hard hit last week owing to mounting inflation, tighter-than-expected Fed and concerns of economic slowdown and a near-term recession. The Dow, the S&P 500 and the Nasdaq Composite – tanked 4.6%, 5.15 and 5.6%, respectively. The three major stock indexes recorded their second straight week of losses and worse weekly performance since January 2022.
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Stock Market News for Jun 13, 2022
U.S. stock markets suffered a bloody blow on Friday after a key inflation data came in at worse than expected. Market participants remained highly concerned regarding economic slowdown and the possibility of a near-term recession. All three major stock indexes plunged on the last trading day of the week.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) tumbled 2.7% or 880 points to close at 31,392.79. Notably, 29 components of the 30-stock index ended in negative territory while just one kin green. The blue-chip index is down 13.6% year to date.
The tech-heavy Nasdaq Composite finished at 11,340.02, sliding 3.5% or 414.20 points due to the disappointing performance of large-cap technology stocks. The tech-laden index is down 27.5% year to date and is under bear market territory since March.
Meanwhile, the S&P 500 tanked 2.9% or 116.96 points to end at 3,900.86. The broad-market index is down 18.2% year to date. All 11 broad sectors of the benchmark index closed in negative zone.
The Consumer Discretionary Select Sector SPDR (XLY), the Financials Select Sector SPDR (XLF), the Materials Select Sector SPDR (XLB), the Technology Select Sector SPADR (XLK) and the Industrials Select Sector SPDR (XLC) slumped 4%, 3.6%, 3.1%, 3.8% and 3%, respectively.
The major loser of the market’s benchmark was Caesars Entertainment Inc. (CZR - Free Report) , shares of which tumbled 9.3%. Caesars Entertainment carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The fear-gauge CBOE Volatility Index (VIX) was up 6.4% to 27.75. A total of 12.62 billion shares were traded Friday, higher than the last 20-session average of 11.88 billion. Decliners outnumbered advancers on the NYSE by a 5.70-to-1 ratio. On Nasdaq, a 4.05-to-1 ratio favored declining issues.
Inflation Data Worse-Than-Expected
The Department of Labor reported that the consumer price index (CPI) – popularly known as household inflation – rose 1% in May compared with 0.3% in April. The consensus estimate was 0.7%. The core CPI (excluding volatile food and energy items) was up 0.6% in May in line with the previous month. The consensus estimate was 0.5%.
Year over year, CPI jumped 8.6% in May compared with 8.3% in April. May’s reading was the highest since December 1981. The core CPI climbed 6% year over year in May, exceeding the consensus estimate of 5.9%. However, April’s reading was 6.2%.
Gasoline prices rebounded 4.1% after falling 6.1% in April. Natural gas prices increased 0.8%, its highest since October 2005. Overall food prices were hiked by 1.2% while foods specifically used for household consumption grew 1.4%, reflecting the fifth consecutive months of increasing more than 1%. Moreover, dairy and related products registered their biggest monthly gain since July 2007.
Consumer Sentiment at Record-Low
The University of Michigan reported that the preliminary reading of the U.S. consumer sentiment drooped to 50.2% in June from 58.4% In May. The consensus estimate was 58.5%. June’s data was mostly in line with the low levels of 1980.
The gauge for current condition slid to 55.4% in June from 63.3% in May. The gauge for expectations tumbled 46.8% in June from 55.2% in May. Per the study, Americans’ are expecting overall inflation over the next year rose to 5.4% in June from 3.3% in May while for next five years, the expectation rose to 3.35 in June from 3% in May.
Weekly Roundup
Wall Street was hard hit last week owing to mounting inflation, tighter-than-expected Fed and concerns of economic slowdown and a near-term recession. The Dow, the S&P 500 and the Nasdaq Composite – tanked 4.6%, 5.15 and 5.6%, respectively. The three major stock indexes recorded their second straight week of losses and worse weekly performance since January 2022.