U.S. Stocks Move Mostly Lower As Inflation Data Looms

Stocks have moved mostly lower in morning trading on Tuesday, with the major averages all moving to the downside after ending yesterday’s choppy session narrowly mixed.

Currently, the Nasdaq is down 69.63 points or 0.6 percent at 12,187.29 and the S&P 500 is down 18.19 points or 0.4 percent at 4,119.93. The narrower Dow is posting a more modest loss, edging down 47.09 points or 0.1 percent to 33,571.60.

Overseas weakness has carried over onto Wall Street amid ongoing concerns about the outlook for the global economy following disappointing Chinese trade data.

Traders may also be moving money out of relatively risky assets like stocks ahead of the release of key inflation data in the coming days.

The reports on consumer and producer price inflation, which are due to be released on Wednesday and Thursday, respectively, could have a significant impact on the outlook for interest rates.

Ahead of the data, CME Group’s FedWatch Tool is currently indicating an 82.3 percent chance the Federal Reserve will leave interest rates unchanged at its next meeting in June.

Fed Chair Jerome Powell said following last week’s rate hike that the central bank would take a “data-dependent approach” to future monetary policy decisions.

Overall trading activity remains relatively subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

Tobacco stocks have shown a significant move to the downside on the day, dragging the NYSE Arca Tobacco Index down by 2.4 percent to its lowest intraday level in well over a month.

Considerable weakness is also visible among semiconductor stocks, as reflected by the 1.8 percent drop by the Philadelphia Semiconductor Index.

Chipmaker Skyworks Solutions (SWKS) is posting a steep loss after reporting better than expected fiscal second quarter results but providing disappointing guidance for the current quarter.

Chemical, computer hardware and banking stocks are also seeing notable weakness, while most of the other major sectors are showing more modest moves.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday, although Japan’s Nikkei 225 Index bucked the downtrend and jumped by 1.0 percent. China’s Shanghai Composite Index slumped by 1.1 percent, while Hong Kong’s Hang Seng Index plunged by 2.1 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has slumped by 0.9 percent, the U.K.’s FTSE 100 Index and the German DAX Index are both down by 0.3 percent.

In the bond market, treasuries have pulled back near the unchanged line after seeing initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 3.513 percent.

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