S&P 500 and Nasdaq end higher in choppy session as inflation data looms

  • All eyes on US CPI data on Wednesday
  • Peloton falls as CEO says company is ‘thinly capitalized’
  • Indices: Dow down 0.3%, S&P 500 up 0.3%, Nasdaq up 1%

NEW YORK, May 10 (Reuters) – The S&P 500 and Nasdaq ended higher on Tuesday, with major growth stocks rising after the previous day’s sell-off as Treasury yields fell.

Bank stocks fell along with yields. The yield on the 10-year benchmark notes fell from a high of more than three years to less than 3%.

The Dow also ended lower and the day’s trading was choppy, with major indexes swinging between gains and losses as investors jittery ahead of the release of Wednesday’s U.S. Consumer Price Index data and data. Thursday’s producer prices.

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Investors will be on the lookout for signs that inflation is peaking. Read more

Fears that the US Federal Reserve will need to take more aggressive action to rein in inflation were behind the recent market selloff. A host of other concerns added to the pressure.

“It’s just fear-based selling,” said Jake Dollarhide, managing director of Longbow Asset Management in Tulsa, Oklahoma.

“It can’t just be that the Fed is going to raise rates to avoid inflation, because we’ve seen that before,” he said. Instead, investors worried about everything from rates and inflation to war in Ukraine, supply chain issues and COVID-19 lockdowns in China, Dollarhide said.

Shares of Apple Inc (AAPL.O) rose 1.6% and gave the S&P 500 and Nasdaq their biggest gains.

The Dow Jones Industrial Average (.DJI) fell 84.96 points, or 0.26%, to 32,160.74, the S&P 500 (.SPX) gained 9.81 points, or 0.25%, to 4,001.05 and the Nasdaq Composite (.IXIC) added 114.42 points, or 0.98%, to 11,737.67.

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 9, 2022. REUTERS/Brendan McDermid

Technology and growth stocks, whose valuations depend more on future cash flows, were among the hardest hit by the recent selloff. The Nasdaq is down about 25% for the year so far.

S&P 500 Technology (.SPLRCT) rose 1.6% on the day and led the gains for the S&P 500 sector. The S&P 500 Growth Index (.IGX) rose 0.9%, while the S&P 500 Value Index (.IVX) fell 0.4%.

Investors digested comments from Cleveland Fed Chair Loretta Mester, who said the U.S. economy would experience turbulence due to the Fed’s efforts to bring inflation down to more than three times its target and recent stock market volatility would not discourage policymakers. Read more

US President Joe Biden, in a speech Tuesday on high inflation, said he was considering eliminating Trump-era tariffs on China as a way to lower commodity prices in the United States. Read more

Among the day’s gainers, shares of Pfizer Inc (PFE.N) rose 1.7% after announcing it would pay $11.6 billion to buy Biohaven Pharmaceutical Holding Co (BHVN.N). read more Biohaven shares jumped 68.4%.

By contrast, Peloton Interactive Inc (PTON.O) fell 8.7% as the fitness equipment maker warned the company was “thinly capitalized” after posting a 23.6% drop in its quarterly income. Read more

Volume on U.S. exchanges was 15.45 billion shares, compared to an average of 12.55 billion for the full session over the past 20 trading days.

Falling issues outnumbered rising ones on the NYSE by a ratio of 1.36 to 1; on the Nasdaq, a ratio of 1.34 to 1 favored the decliners.

The S&P 500 posted 1 new 52-week high and 63 new lows; the Nasdaq Composite recorded 19 new highs and 1,066 new lows.

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Reporting by Caroline Valetkevitch; additional reporting by Amruta Khandekar and Devik Jain in Bengaluru; Editing by Sriraj Kalluvila, Shounak Dasgupta and Aurora Ellis

Our standards: The Thomson Reuters Trust Principles.

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