Following the pullback seen in the previous session, stocks have shown a lack of direction over the course of the trading day on Wednesday. The major averages have spent the day bouncing back and forth across the unchanged line.
Currently, the major averages are narrowly mixed. While the Nasdaq is down 43.57 points or 0.2 percent at 19,237.83, the S&P 500 is up 2.22 points or less than a tenth of a percent at 5,986.21 and the Dow is up 122.82 points or 0.3 percent at 44,033.80.
The choppy trading on Wall Street comes after the Labor Department released closely watched consumer price inflation data that came in line with economist estimates.
The Labor Department said its consumer price index crept up by 0.2 percent in October, matching the upticks seen in each of the three previous months as well as expectations.
The report also said the annual rate of consumer price growth accelerated to 2.6 percent in October from 2.4 percent in September. The faster growth also came in line with economist estimates.
Excluding food and energy prices, core consumer prices climbed by 0.3 percent in October, matching the increases seen in each of the two previous months along with expectations.
The annual rate of core consumer price growth was unchanged from the previous month at 3.3 percent, which was also in line with estimates.
The data matching expectations has seemingly increased confidence the Federal Reserve will continue lowering interest rates next month, but inflation remaining somewhat sticky has led to uncertainty about the likelihood of future rate cuts.
“The 2.6% year-over-year print, while expected, may keep the Fed mindful from declaring victory over its campaign to quell inflation,” said Quincy Krosby, Chief Global Strategist for LPL Financial.
CME Group’s FedWatch Tool is currently indicating an 82.3 percent chance of another quarter point rate cut in December but a 60.2 percent chance rates will then be left unchanged in January.
Sector News
Airline stocks are seeing substantial weakness on the day, extending the pullback seen in the previous session. The NYSE Arca Airline Index is plunging by 5.4 percent, continuing to give back ground after reaching its best closing level in over a year on Monday.
A nosedive by shares of Spirit Airlines (SAVE) is weighing on the sector, with the discount airline plummeting by 56.5 percent after a report from the Wall Street Journal said Spirit is preparing to file for bankruptcy protection after merger talks with Frontier Airlines (ULCC) broke down.
Significant weakness is also visible among semiconductor stocks, as reflected by the 1.5 percent loss being posted by the Philadelphia Semiconductor Index.
On the other hand, banking stocks have shown a strong move to the upside on the day, driving the KBW Bank Index up by 1.3 percent to a two-year intraday high.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan’s Nikkei 225 Index tumbled by 1.7 percent, while Hong Kong’s Hang Seng Index edged down by 0.1 percent.
The major European markets have also moved to the downside on the day. While the U.K.’s FTSE 100 Index is down by 0.3 percent, the German DAX Index and the French CAC 40 Index are both down by 0.8 percent.
In the bond market, treasuries have pulled back off their highs of the session but continue to see modest strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.7 basis points at 4.416 percent.
U.S. Stocks Lack Direction As Traders Digest Inflation Data
2024-11-13 16:09:19
