U.S. Stocks Turning In A Mixed Performance Following Inflation Data

After ending the previous session at new record closing highs, the major U.S. stocks indexes are turning in a mixed performance during trading on Tuesday. Despite the choppy trading, the Nasdaq and the S&P 500 have reached new record intraday highs.

Currently, the major averages remain on opposite sides of the unchanged line. While the Dow is down 65.32 points or 0.2 percent at 34,930.86, the Nasdaq is up 43.40 points or 0.3 percent at 14,776.64 and the S&P 500 is up 1.60 points or less than a tenth of a percent at 4,386.23.

The mixed performance on Wall Street comes after a report from the Labor Department showed consumer prices in the U.S. saw the biggest monthly increase in thirteen years in the month of June.

The Labor Department said its consumer price index jumped by 0.9 percent in June after climbing by 0.6 percent in May. Economists had expected consumer prices to rise by 0.5 percent.

The bigger than expected increase in consumer prices reflected the biggest advance since prices surged up by 1.0 percent in June of 2008.

Excluding food and energy prices, core consumer prices still jumped by 0.9 percent in June following a 0.7 percent increase in May. Core prices were expected to rise by 0.4 percent.

The annual rate of consumer price growth accelerated to 5.4 percent in June from 5 percent in May, reaching the highest level since a matching spike in August of 2008.

Core consumer prices were up by 4.5 percent year-over-year in June, reflecting an acceleration from the 3.8 percent jump in May. Core prices saw the biggest annual increase since November of 1991.

“The surge in demand triggered by the easing of Corona-related restrictions is causing significant bottlenecks and price increases in parts of the economy,” said Dr. Christoph Balz, Senior Economist at Commerzbank. “Under these circumstances, the Fed’s tapering of its bond purchases is drawing closer.”

On the earnings front, financial giants JPMorgan Chase (JPM) and Goldman Sachs (GS) both reported quarterly results that exceeded analyst estimates on both the top and bottom lines.

Snack and beverage giant PepsiCo (PEP) also reported better than expected second quarter results and raised its full-year guidance.

Oil service stocks have shown a substantial move to the downside on the day, dragging the Philadelphia Oil Service Index down by 2.2 percent.

The weakness among oil service stocks comes despite a modest increase by the price of crude oil, with crude for August delivery inching up $0.05 to $74.15 a barrel.

Significant weakness is also visible among airline stocks, as reflected by the 2 percent drop by the NYSE Arca Airline Index.

Banking, housing and steel stocks are also seeing considerable weakness, while gold and software stocks have moved notably higher.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan’s Nikkei 225 Index and China’s Shanghai Composite Index both climbed by 0.5 percent, while Hong Kong’s Hang Seng Index jumped by 1.6 percent.

Meanwhile, the major European markets have moved modestly lower on the day. While the U.K.’s FTSE 100 Index is down by 0.1 percent, the German DAX Index is down by 0.2 percent and the French CAC 40 Index is down by 0.3 percent.

In the bond market, treasuries continue to show a lack of direction after ending the previous session nearly unchanged. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 1.356 percent.