U.S. Stocks Seeing Substantial Volatility After Reaching New Record Highs

After moving to the upside at the start of trading on Wednesday, stocks have seen substantial volatility over the course of the morning. The major averages have shown wild swings after reaching new record intraday highs in early trading.

Currently, the major averages are turning in a mixed performance. While the Dow is up 42.97 points or 0.1 percent at 31,418.80, the Nasdaq is down 68.46 points or 0.5 percent at 13,939.24 and the S&P 500 is down 5.34 points or 0.1 percent at 3,905.89.

Stocks initially moved to the upside on the heels of upbeat earnings news from big-name companies like Twitter (TWTR), Coca-Cola (KO), and Lyft (LYFT).

Buying interest waned shortly after the start of trading, however, as traders expressed some uncertainty about the near-term outlook for the markets.

The major averages subsequently pulled back sharply, with the tech-heavy Nasdaq leading the way lower amid weakness among stocks like Amazon (AMZN) and Apple (AAPL).

Traders may be worried that the markets have become overbought as a new fiscal stimulus bill continues to slowly work its way through Congress.

Negotiations over the previous bipartisan bill took months to complete, and it remains to be seen if Democrats will be able to keep their caucus together and pass a relief package through the reconciliation process.

In economic news, the Labor Department released a report showing consumer prices in the U.S. increased in line with economist estimates in the month of January.

The Labor Department said its consumer price index rose by 0.3 percent in January after edging up by a revised 0.2 percent in December.

Economists had expected consumer prices to climb by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month.

Excluding food and energy prices, core consumer prices came in unchanged for the second consecutive month. Core prices were expected to rise by 0.2 percent.

Later in the day, traders are likely to keep an eye on remarks by Federal Reserve Chair Jerome Powell, who is scheduled to speak before a virtual Economic Club of New York event at 2 pm ET.

Most of the major sectors are showing only modest moves on the day amid the volatility being shown by the broader markets.

Tobacco stocks have shown a notable move to the downside, however, with the NYSE Arca Tobacco Index slumping by 1.2 percent after ending the previous session at its best closing level in well over a year.

On the other hand, airline stocks are seeing significant strength in morning trading, driving the NYSE Arca Airline Index up by 1.6 percent. The index has offset the pullback seen on Tuesday.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index inched up by 0.2 percent, while China’s Shanghai Composite Index jumped by 1.4 percent.

Meanwhile, the major European markets have come under pressure over the course of the session. While the German DAX Index has slumped by 1.1 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index are both down by 0.7 percent.

In the bond market, treasuries have rebounded after moving to the downside at the start of trading. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.6 basis points at 1.141 percent.

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