- US stocks stumbled at the close as investors mulled a higher than expected inflation reading from earlier Tuesday.
- The Consumer Price Index increased 0.9% in June, far higher than Bloomberg’s consensus estimate among economists of 0.5%.
- Goldman Sachs and JPMorgan kicked off a series of bank earnings this week. Both firms beat expectations.
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US stocks fell Tuesday after inflation data showed prices rose more than expected in June.
The Consumer Price Index increased 0.9% in June, far higher than Bloomberg’s consensus estimate among economists of 0.5%. The reading marked the largest one-month change since June 2008.
On a year-over-year basis, prices increased 5.4%, higher than economists’ expectations for a 4.9% year-over-year increase. However, June 2020 was the lowest point for Core CPI during the pandemic shutdown, so year-over-year increases are expected.
Here’s where US indexes stood at the 4 p.m. ET close on Tuesday:
- S&P 500: 4,369.27, down 0.35%
- Dow Jones industrial average: 34,888.99, down 0.31% (107.19 points)
- Nasdaq composite: 14,677.65, down 0.38%
Mike Lowengart, E*Trade Financial managing director of investment strategy, said that the real question on investors’ minds after the CPI read is how long hot inflation numbers will last.
“Transitory has been the buzzword when it comes to inflation but it’s a tricky phrase. Does it mean a few months, a year, or even longer? Every successive high inflation read will make it harder and harder for the Fed to remain accommodative. And on the markets front, we may experience a bit of a tug of war as traders balance the economic data with strong bank earnings beginning to roll in,” he said.
The benchmark index has notched 39 record closing highs through Monday’s session, according to Bespoke Investment Group. If it keeps up its current pace, it could close out 2021 with 74 record closing highs, the second-most of all time, Bespoke said.
The yield on the US 10-year Treasury gained 4.7 basis points to 1.41%.
Gold was flat at $1,807.2 per ounce.