Stocks Lower as Investors Prepare for Further Inflation Data…..
U.S. equities declined in a choppy and cautious trading session as investors await a host of notable economic reports later this week. The economic docket, while empty today, will round out the inflation picture with tomorrow’s release of the Producer Price Index (PPI), as well as the Import Price Index on Wednesday. The releases will follow last week’s cooler-than-expected Consumer Price Index (CPI), which appeared to soothe concerns about how aggressive the Fed will need to remain. Treasury yields were mostly higher, and the U.S. dollar rose, paring some of last week’s tumble. Crude oil prices were lower, while gold reversed to the upside following losses earlier in the day. Equity news was light, with Tyson Foods missing on the bottom line, but reporting record sales for the year and upping its quarterly dividend. Stocks in Asia were mixed, with Hong Kong leading the region in gains following a jump in property stocks, while European stocks ended the day mostly higher in cautious trading.
The Dow Jones Industrial Average decreased 211 points (0.6%) to 33,537, the S&P 500 Index went down 36 points (0.9%) to 3,957, and the Nasdaq Composite fell 127 points (1.1%) to 11,196. In moderate volume, 4.5 billion shares of NYSE-listed stocks were traded, and 4.9 billion shares changed hands on the Nasdaq. WTI crude oil lost $3.09 to $85.87 per barrel. Elsewhere, the gold spot price increased $6.50 to $1,775.90 per ounce, and the Dollar Index rallied 0.5% to 106.85.
Treasury yields were mostly higher with the economic calendar void of any reports to provide any sway, as the yield on the 2-year note rose 9 basis point (bps) at 4.41%, the yield on the 10-year note gained 5 bps to 3.87%, and the 30-year bond unchanged at 4.05%.
Market volatility may continue this week, as the rest of the October inflation picture will be revealed, following last week’s rally in the wake of a cooler-than-expected consumer price inflation report. Inflation has been the driving factor behind the aggressive monetary policy from the Federal Reserve. Elevated bond yields and this year’s rise in the U.S. dollar have fostered the choppiness in the markets.
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