US open: Stocks lower following CPI reading

Wall Street stocks opened lower yet again on Wednesday following the release of April's consumer price index.

As of 1540 BST, the Dow Jones Industrial Average was down 0.69% at 34,033.67, while the S&P 500 was 0.90% weaker at 4,114.54 and the Nasdaq Composite came out the gate 1.53% softer at 13,184.38.

The Dow opened 235.49 points lower on Wednesday, extending losses recorded in the previous session despite big-name tech stocks staging a late reversal.

In focus early on Wednesday was April's consumer price index, which rose 4.2% year-on-year, according to the Labor Department, ahead of estimates for a print of 3.6% and the fastest pace of acceleration since September 2008. The monthly gain was 0.8%, well ahead of the 0.2% advance expected on the Street.

Base effects were seen as the principal reason for the increase, given that inflation was considerably lower at the same time in 2020, with the Covid-19 pandemic leading to a widespread shutdown of the US economy, meaning year-on-year comparisons will be distorted over the next few months as a result of the pandemic.

As a result, the Federal Reserve will likely dismiss the current round of numbers as being transitory and expect inflation to settle to around the 2% being targeted by the central bank later in the year.

Tech shares were again under pressure, with the likes of Alphabet, Microsoft, Netflix, Facebook and Apple all trading lower.

Chipmakers Nvidia and AMD were also in the red, as were economic reopening plays such as Carnival, Boeing and United Airlines.

Elsewhere on the macro front, the Federal government's April budget statement will be published at 1800 BST, while Federal Reserve presidents Richard Clarida, Raphael Bostic and Patrick Harker will all deliver speeches throughout the course of the day.