Spencer Platt/Getty Images News
U.S. stocks on Wednesday ended mixed after the latest consumer price index (CPI) report showed an increase in core inflation for the first time in six months.
The tech-heavy Nasdaq Composite (COMP.IND) closed 0.29% higher at 13,813.59 points. The benchmark S&P 500 (SP500) added 0.13% to settle at 4,467.48 points, while the blue-chip Dow (DJI) slipped 0.20% to finish at 34,575.70 points.
“September 13 proved to be a rather mixed day for market participants. The Dow Jones Industrial Average (DJI), for instance, dropped around 100 points. The S&P 500 (SP500) remained roughly flat. And the Nasdaq (COMP.IND) managed to rise slightly. This volatility can really be chalked up to inflationary pressures,” Daniel Jones, investing group leader of Crude Value Insights, told Seeking Alpha.
Of the 11 S&P sectors, six closed in positive territory, led by Utilities and Consumer Discretionary. Real Estate, Energy and Industrials were the top three losers.
“It’s not surprising to see industrial stocks affected more than those that are not industrial in nature. This is because industrial companies tend to be asset intensive and that very nature makes interest rates aimed at combating inflation, as well as inflation itself, more costly to fund or maintain physical assets,” Jones said.
The U.S. Bureau of Labor Statistics earlier in the day said consumer prices in August rose 0.6% M/M, surging from the 0.2% rise in July and matching expectations of +0.6%. On a Y/Y basis, the headline number rose 3.7%, higher than the expected figure of +3.6% and accelerating from July’s +3.2% reading. Core CPI, which excludes food and energy prices, also accelerated on a M/M basis, but fell on a Y/Y basis.
“It should be mentioned that fuel costs, particularly crude prices, have recently hit a new year to date high and the overall upward trend in pricing on that front played a significant role in the inflationary pressures that were reported,” Jones added.
According to the CME FedWatch tool, markets still believe it is a near certainty the Fed’s monetary policy committee will hold rates steady at next week’s meeting. Meanwhile, the odds of another hold at November’s meeting showed an uptick to nearly 60%, but fell slightly to about 54% for December’s meeting.
Treasury yields on Wednesday were largely muted after the CPI data. The longer-end 10-year yield (US10Y) was down 1 basis point to 4.25%, while the more rate-sensitive 2-year yield (US2Y) was down 3 basis point to 4.98%.
See how Treasury yields have done across the curve at the Seeking Alpha bond page.
Turning to active stock movers, J.B. Hunt Transport Services (JBHT) ended as the top percentage gainer on the S&P 500 (SP500) after issuing positive growth outlook at a conference.