US Stock Market: DJIA, S&P500 and Nasdaq turns red in early trade on Thursday
- Dow Jones Industrial Average fell 142 points or 0.5% to 31,814
- Technology stocks were among the biggest losers
- The yield on the 10-year Treasury dropped to 2.86% from 2.92%
Stocks trembled in morning trading on Wall Street as investors received another frightful report on inflation.
The S&P 500 fell 0.4% as of 10:26 am Eastern time zone. The Dow Jones Industrial Average fell 142 points or 0.5% to 31,814. The Nasdaq was little changed.
Retailers and household goods companies gained ground. Amazon rose 1.6% and Walmart surged 1.5%
The yield on the 10-year Treasury dropped to 2.86% from 2.92%.
Major indexes are all in the red for the week as investors remained concerned about rising inflation, hiking interest rates and their impact on the economy.
The Labor Department’s report released on Thursday showed that wholesale prices surged 11% in April from a year ago. Many of the costs at the wholesale level are being passed on to end consumers as companies try to cover soaring expenses. That has raised concerns about a potential pullback in spending that could hurt economic growth.
Inflationary pressure has been rising for consumers. On Wednesday, the Labor Department's report on consumer prices showed a bigger increase than expected in prices outside food and gasoline, something economists call "core inflation" and which can be more predictive of future trends.
Soaring inflation has triggered the Federal Reserve to hike its benchmark short-term interest rate from its record low near zero, where it spent most of the pandemic. The Fed said it may continue to hike rates by double the usual amount at upcoming meetings.
Investors are worried that the central bank could lead to a recession if it raises rates too high or too fast.
The ongoing Russia-Ukraine war has worsened the inflation and the conflicts impact on rising energy prices. China’s recent shutdowns due to COVID-19 resurgence have also worsened supply chain and production problems at the centre of rising inflation.
The recent batch of corporate earnings are also being closely reviewed by Wall Street. Entertainment major Disney declined 1.5% after missing analysts’ estimates in its latest earnings report. Coach and Kate Spade owner Tapestry surged 12.7% after reporting strong financial results.