US open: Stocks sharply lower as CPI reading remains in focus

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 were firmly in the red early 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.

As of 1525 BST, the Dow Jones Industrial Average was down 2.23% at 30.693.47, while the S&P 500 was 2.94% weaker at 3,786.14 and the Nasdaq Composite came out the gate 3.49% softer at 10,944.55.

The Dow opened 699.32 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 more than 14 basis points to 3.212% at the open on Monday, its highest level since 2007, 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 ten basis points to sit above above its two-year counterpart at 3.271%.

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 in early trading.

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 will be published at 1600 BST and Federal Reserve vice chair Lael Brainard will deliver a speech at 1900 BST.

In the corporate space, Oracle will issue an update on recent trading after the close.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

International Business Machines Corporation (CDI) (IBM) $136.67 0.35%
Honeywell International Inc. (HON) $230.94 0.00%
Dowdupont Inc. (DWDP) $30.52 0.00%
Coca-Cola Co. (KO) $61.13 -0.46%
Cisco Systems Inc. (CSCO) $43.26 -0.53%
3M Co. (MMM) $136.83 -0.60%
Travelers Company Inc. (TRV) $168.01 -0.76%
Goldman Sachs Group Inc. (GS) $284.45 -0.90%
McDonald's Corp. (MCD) $235.24 -0.90%
Johnson & Johnson (JNJ) $170.84 -0.99%