US close: Stocks end session lower following red hot CPI reading

Wall Street stocks ended the session in the red on Tuesday as market participants digested a key inflation report from the Labor Department.

At the close, the Dow Jones Industrial Average was down 0.26% at 34,220.36, while the S&P was 0.34% weaker at 4,397.45 and the Nasdaq Composite saw out the session 0.30% softer at 13,371.57.

The Dow closed 87.72 points lower on Tuesday, extending losses recorded in the previous session.

Tuesday's primary focus was last month's consumer price index, which revealed US inflation had hit a fresh 40-year high in March as energy prices surged due to Russia's invasion of neighbouring Ukraine.

According to the Labor Department, consumer price inflation jumped to 8.5% - its fastest annual rate of growth since 1981 - from 7.9% in February. Analysts had been expecting a figure of 8.4%. On the month, prices were up 1.2% in March, versus a 0.8% increase in February and marking the biggest jump since 2005. The gasoline index surged 18.3%, accounting for more than half the total monthly increase. Food prices rose 1%, while shelter prices were 0.5% higher.

Stripping out volatile food and energy costs, core inflation was 6.5% on an annualised basis, up 0.1 percentage point on the month but below consensus estimates of 6.6%. On a monthly basis, core CPI was 0.3%, down from 0.5% in February and below consensus expectations of no change. It also marked the lowest level since September.

Elsewhere on the macro front, the National Federation of Independent Business' small business optimism index declined for a third straight month in March, falling from 95.7 in February to 93.2 - the lowest since April 2020. The percentage of owners expecting better business conditions over the next six months decreased 49%, the lowest level on record, with inflation seen as the most important problem by 31% of business owners, the biggest share since the first quarter of 1981.

"With inflation, an ongoing staffing shortage, and supply-chain disruptions, small-business owners remain pessimistic about their future business conditions. Their expectations for sales growth and business conditions later this year are in the tank" said NFIB chief economist Bill Dunkelberg.

Still on data, the US budget deficit narrowed to $193.0bn in March from the $660.0bn gap reported at the same time a year agp, broadly in line with expectations of a $191.0bn print. Receipts jumped 18% to $315.0bn, the highest on record for a March, while outlays slumped 45% to $508.0bn due to a sharp decline in Covid-19 relief outlays.

Also drawing investor attention was news that Treasury yields had jumped to multi-year highs, with the yield on the benchmark 10-year Treasury note briefly trading at 2.801% early on Tuesday - a level not recorded in over than three years - before dropping back to 2.727% shortly after the open.

No major corporate earnings released on Tuesday but JPMorgan Chase and Delta were both set to report results on Wednesday, while Citigroup, Goldman Sachs, Morgan Stanley and Wells Fargo will report before markets open on Thursday.

Dow Jones - Risers

Dow Chemical Co. (DOW) $63.34 2.24%
Chevron Corp. (CVX) $168.94 2.04%
Coca-Cola Co. (KO) $64.60 1.23%
Apple Inc. (AAPL) $167.66 1.15%
Boeing Co. (BA) $176.31 0.73%
Caterpillar Inc. (CAT) $216.65 0.28%
Nike Inc. (NKE) $125.18 0.16%
Walt Disney Co. (DIS) $130.84 0.15%
Johnson & Johnson (JNJ) $180.01 0.09%
Home Depot Inc. (HD) $306.79 0.02%

Dow Jones - Fallers

Cisco Systems Inc. (CSCO) $51.82 -2.00%
Visa Inc. (V) $211.16 -1.67%
Merck & Co. Inc. (MRK) $85.63 -1.15%
American Express Co. (AXP) $175.54 -1.14%
Microsoft Corp. (MSFT) $282.06 -1.12%
JP Morgan Chase & Co. (JPM) $131.64 -1.02%
3M Co. (MMM) $148.66 -0.97%
Unitedhealth Group Inc. (UNH) $533.71 -0.69%
Walmart Inc. (WMT) $153.23 -0.69%
McDonald's Corp. (MCD) $249.23 -0.49%

S&P 500 - Risers

Kohls Corp. (KSS) $60.38 5.49%
Marathon Oil Corp. (MRO) $26.25 4.08%
Helmerich & Payne Inc. (HP) $46.37 3.76%
Devon Energy Corp. (DVN) $62.25 3.70%
Cardinal Health Inc. (CAH) $63.32 3.16%
Darden Restaurants Inc. (DRI) $130.51 3.14%
FMC Technologies Inc. (FTI) $7.94 2.98%
Nucor Corp. (NUE) $157.28 2.93%
Diamondback Energy Inc. (FANG) $138.98 2.86%
Apache Corp. (APA) $42.18 2.70%

S&P 500 - Fallers

Carmax Inc. (KMX) $93.27 -9.60%
Twitter Inc (TWTR) $44.48 -5.38%
Agilent Technologies Inc. (A) $125.33 -4.52%
Danaher Corp. (DHR) $280.48 -3.65%
Idexx Laboratories Inc. (IDXX) $497.46 -3.31%
Kroger Co. (KR) $58.78 -3.08%
Waters Corp. (WAT) $294.02 -2.83%
PerkinElmer Inc. (PKI) $161.19 -2.76%
Intercontinental Exchange Inc (ICE) $124.68 -2.67%
Progressive Corp. (PGR) $115.34 -2.61%

Nasdaq 100 - Risers

Trip.com Group Limited (TCOM) $22.09 2.79%
Ross Stores Inc. (ROST) $102.19 2.49%
Apple Inc. (AAPL) $167.66 1.15%
Tesla Inc (TSLA) $986.95 1.13%
Dollar Tree Inc (DLTR) $167.19 1.03%
Western Digital Corp. (WDC) $47.50 1.02%
Henry Schein Inc. (HSIC) $91.08 0.96%
American Airlines Group (AAL) $17.13 0.94%
Electronic Arts Inc. (EA) $123.57 0.81%
T-Mobile Us, Inc. (TMUS) $131.44 0.78%

Nasdaq 100 - Fallers

Idexx Laboratories Inc. (IDXX) $497.46 -3.31%
NetEase Inc. Ads (NTES) $92.24 -2.92%
Intuit Inc. (INTU) $461.57 -2.49%
Qurate Retail Inc. (QRTEA) $4.39 -2.34%
Cisco Systems Inc. (CSCO) $51.82 -2.00%
Charter Communications Inc. (CHTR) $549.12 -1.93%
Liberty Global plc Series A (LBTYA) $24.96 -1.93%
Illumina Inc. (ILMN) $344.59 -1.90%
Nvidia Corp. (NVDA) $215.04 -1.88%
Lam Research Corp. (LRCX) $466.96 -1.85%