US close: Stocks lower as CPI reading continues to weigh on sentiment

By Sharecast News

Sharecast News | 13 Jun, 2022

Wall Street stocks closed sharply lower on Monday as last month's hotter-than-expected CPI reading and expectations of a Federal Reserve rate hike later in the week remained in focus.

At the close, the Dow Jones Industrial Average was down 2.79% at 30,516.74, while the S&P 500 was 3.88% weaker at 3,749.63 and the Nasdaq Composite saw out the session 4.68% softer at 10,809.23.

The Dow closed 876.05 points lower on Monday and the S&P 500 fell back into bear market territory, hitting a new intraday low for the year and its lowest level since March 2021, as market participants zeroed in revelations that the consumer price index had risen 8.6% year-on-year in May, its fastest increase since December 1981.

The short-term two-year Treasury yield rose almost 30 basis points to 3.367% on Monday, its highest level in more than 15 years, as Wall Street traders continued to bet the central bank will likely have to get even more aggressive than initially expected in order to squash inflation.

The two-year note also traded above the 10-year note before the open on Monday - a move often seen as a recession indicator - however, the yield on the benchmark 10-year Treasury note later advanced more than 21 basis points to sit up above its two-year counterpart at 3.381%.

Also in focus, gasoline prices exceeded $5 per gallon over the weekend, exacerbating concerns stemming from rising inflation and falling consumer confidence and sending recession-sensitive stocks like Boeing, Marriott, Hilton, and Delta Airlines down on the session.

Bitcoin slumped from more than $29,000 on Friday to less than $24,000 on Monday amid efforts by risk-averse investors to cryptocurrency assets amid rising rates.

On the macro front, consumer inflation expectations for May rose to 6.6%, up from 6.3% in April and matching March's record high.

In the corporate space, Oracle shares were up roughly 9% in extended trading after the software giant posted strong quarterly cloud revenues.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

McDonald's Corp. (MCD) $238.47 0.46%
Honeywell International Inc. (HON) $230.94 0.00%
Dowdupont Inc. (DWDP) $30.52 0.00%
Coca-Cola Co. (KO) $61.34 -0.11%
Cisco Systems Inc. (CSCO) $43.24 -0.57%
International Business Machines Corporation (CDI) (IBM) $135.11 -0.79%
3M Co. (MMM) $136.37 -0.93%
Travelers Company Inc. (TRV) $167.71 -0.94%
Johnson & Johnson (JNJ) $170.81 -1.01%
Goldman Sachs Group Inc. (GS) $283.32 -1.29%