The S&P 500 and Dow rose in choppy trading on Wednesday as banks and energy stocks rose, while the tech-heavy Nasdaq came under pressure as inflation data cemented hopes of aggressive interest rate hikes.
Ten of 11 major S&P sectors advanced in morning trading. Energy rose 3.4% as oil prices jumped more than 4% on supply concerns.
Financials added 1.1% and Bank climbed 1.5%, tracking the benchmark 10-year Treasury yield, which climbed above 3%.
However, the prospect of rising interest rates affected megacap stocks such as Amazon.com, Microsoft Corp, Apple Inc, Meta Platforms and Tesla Inc, falling between 0.2% and 0.8%.
The Labor Department report showed the consumer price index rose 0.3% last month, the smallest gain since August, but still well above economists’ forecast of 0.2% growth.
The monthly increase in inflation was much lower than the 1.2% increase in March, the biggest increase since September 2005, but traders are still pricing in a 77% chance of a 75-basis point increase next month.
“The data underscores that inflation and rising prices are likely not yet peaking,” said Greg Basuk, chief executive of AXS Investments in Port Chester, New York.
“With supply chain concerns and a potentially more aggressive Federal Reserve policy, the prospect of not just a US but a global recession is certainly going to take a toll on the markets.”
The war in Ukraine coupled with the latest coronavirus lockdown in China has deepened investor concerns about faltering global economic growth.
At 10:14 am, the Dow Jones Industrial Average was up 232.89 points, or 0.72%, at 32,393.63, the S&P 500 was up 21.84 points, or 0.55%, at 4,022.89, and the Nasdaq Composite was down 15.61 points, or 0.13. %, at 11,722.06.
The Nasdaq hit an 18-month low earlier this week as investors dumped megacap growth stocks amid worries that rising rates will dent cash flows in the future.
Coinbase Global Inc fell 22.1% after forecasts missed first-quarter revenue amid turmoil in global markets, curbing investor appetite for riskier assets.
Advancing issues declined by a 2.26-to-1 ratio on the NYSE and a 1.09-to-1 ratio on the Nasdaq.
The S&P index posted a new 52-week high and 53 new lows, while the Nasdaq posted 10 new highs and 751 new lows.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.