US close: Stocks slide ahead of key inflation data

dl exchange place wall st street pl new york city nyc ny nyse stock exchange dow jones sp nasdaq finance dollar dollars us usa united states of america — Exchange PlaceSharecast photo / Josh White

Wall Street stocks closed weaker on Tuesday, as market participants digested more second-quarter earnings and closed their pocketbooks ahead of Wednesday’s inflation reading.

At the close, the Dow Jones Industrial Average was down 0.18% at 32,774.41, while the S&P 500 was 0.42% weaker at 4,122.47 and the Nasdaq Composite lost 1.19% to end the session at 12,493.93.

The Dow closed 58.13 points lower on Tuesday, taking a bite out of gains recorded in the previous session.

“The fears around another potential inflation-fuelled selloff in high multiple stocks has dented the likes of the Nasdaq in particular, with the recent earnings-based optimism starting to wane ahead of tomorrow's crucial US inflation release,” said IG senior market analyst Joshua Mahony.

“For traders, there is an innate risk associated with the widespread expectation that inflation will remain at 9.1%, for any upside surprise could easily spark fears of another sharp increase in rates thanks to Friday’s bumper jobs report.

“With earnings season drawing to an end - 89% reported - there is a distinct possibility that we will see the focus shift back to the worrisome economic and monetary policy outlook that lies ahead.”

Traders were indeed looking ahead to key inflation data scheduled for release on Wednesday, with the CPI print likely to help determine the pace of future interest rate hikes from the Federal Reserve.

There were again no major data points scheduled for release on Tuesday, while on the equities front, Novavax plunged 29.64% after slashing full-year earnings guidance overnight on the back of poor demand for its Covid-19 vaccines.

Nvidia slumped 3.97% after issuing weaker-than-expected revenue guidance, while Micron Technology slid 3.74% after cautioning that "macroeconomic factors and supply chain constraints" meant its revenues could fall short of previous guidance.

Capri Holdings was 4.71% weaker despite reporting a beat on both earnings and revenue estimates, while Ralph Lauren lost 4.34% even after it delivered upbeat growth forecasts and earnings that beat expectations.

On the upside, Hyatt Hotels gained 2.7% after it surpassed expectations on both revenue and profit, as demand for accommodation continued to recover.

Video game engine developer Unity Software was ahead 1.19% after Applovin Corporation made an unsolicited, all-stock offer for the company worth $20bn.

Applovin’s own shares tumbled 10.29% by the closing bell.

Reporting by Josh White at Sharecast.com. Additional reporting by Iain Gilbert.

Dow Jones - Risers

Travelers Company Inc. (TRV) $162.92 1.84%
Chevron Corp. (CVX) $155.41 1.30%
McDonald's Corp. (MCD) $260.06 1.27%
Merck & Co. Inc. (MRK) $89.52 1.16%
Dow Chemical Co. (DOW) $52.72 1.09%
Walmart Inc. (WMT) $128.87 0.99%
American Express Co. (AXP) $158.80 0.97%
JP Morgan Chase & Co. (JPM) $115.38 0.90%
Microsoft Corp. (MSFT) $282.30 0.71%
Goldman Sachs Group Inc. (GS) $336.62 0.58%