United States stocks fell for a third day and bond yields climbed after a report showed inflation more than forecast, adding to concern that price pressures will stifle a recovery in the biggest economy ever.
The technology sector continues to lead the decline in equity markets with Apple and Microsoft pacing downs in the Nasdaq 100.Cathie Wood's ARK Innovation ETF resumed its slide, which reduced your loss by about 17% this year.The S&P 500 benchmark fell after hitting a record high for the third day.The dollar remained higher, while Treasury yields rose.
The CPI data point feeds into a myopic narrative that the US is overheating and the Fed is one step away from tightening, said Mike Bailey, research director at FBB Capital Partners.'Bears will feast on this tightening theme in the short term, but my sense is inflation will be fleeting and markets will revert to a stronger bullish view of moderate growth and lower risk of Fed tightening until we get to a full recovery.
European stocks remained high, lifted by optimism about economic re-openings and the booming commodities.
The debate about whether inflation will be persistent enough to force the Fed ReserveFed Reserve to tighten up on policy sooner than current guidance suggests as global stimulus has fueled a rally in global equity markets, raising concerns that valuations had become expensive.The Fed Vice Chair Richard Clarida says he was surprised at the increase in consumer prices and'we would not hesitate to act to slow inflation to its goals if needed.
The consumer prices index rose in March after a 0.7% gain in the prior month.Excluding volatile food and energy components, the so-called core CPI increased from March to 0.9%.
With inflation numbers being seen at higher than expected - even taking into account local market effects - it will have the market re-evaluating its view on rates, said Chris Zaccarelli, Chief Investment Officer at Independent Advisor Alliance.The bond market has surprisingly been optimistic about rising inflation pressures and eventually it's going to have to acknowledge that current rates are too low.
While copper and iron ore were on course to broaden commodities record expansion, they were on the market for new records.Oil was steady above $65 per barrel.The biggest pipeline in the United States is still closed in the aftermath of a cyberattack, which could lead to acute fuel shortages in some parts of the nation.
What is your question of the day: Should a European Reopening be priced?
These are the major moves in the markets:
The S&P 500 fell 0.9%, falling for the third straight day, the longest losing streak since March 4. The Dow Jones Industrial Average fell 1.7%, falling for the third straight day, the longest losing streak since May 5. MSCI World Index was 0.9%, dropping for the third straight day, the longest losing streak since March 4.
The Bloomberg Dollar Spot Index has slipped 0.4%, more than any closing loss since April 30 The Japanese yen slipped 0.7%, more than any closing loss since March 4.
The yield on 10-year treasuries advanced five basis points, more than any closing gain since April 27 Britain's 10-year yield rose three basis points, climbing for the sixth straight day, the longest winning streak since Feb. 8 Germany's yield advanced four basis points to 0.87%.
West Texas Intermediate crude rose 1.5%, climbing for the fourth straight day, the longest winning streak since April 15 Gold futures.. dropped 0.5% to $1,827 an ounce to $0.25 an ounce
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