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Close Update: US Stocks End Lower Amid Inflation Worries

05/11/2021 12:44

04:39 PM EDT, 05/11/2021 (MT Newswires) -- US stocks ended lower ahead of the inflation report Wednesday that is expected to show consumer prices hit a decade high in April.

The Dow Jones Industrial Average declined by 1.4% to 34,270.35, the S&P 500 was down by 0.9% to 4,152.11, and the Nasdaq Composite was lower by 0.1% at 13,389.43. Energy and financials were among the steepest decliners, with materials the sole gainer among the sectors on Tuesday.

The US 10-year yield climbed by 1.8 basis points to 1.62%.

The latest Consumer Price Index report will offer further insight into the assessment and outlook for price trends in the US, according to Stifel. The base effects are expected to continue to "distort" the headline numbers in the coming months with the annual rate expected to push over 3.5% in April. That rate, as per data compiled by Trading Economics, is the highest since early 2011.

"According to the Fed, higher rates of inflation are primarily the reflection of reflation with the lower lows of 2020 falling out of this year's calculation," Chief Economist Lindsey Piegza said. "It is also a reflection of a temporary recalibration of supply and demand as the US economy -- and the global economy -- reopens and recovers to pre-pandemic activity and consumers adjust their spending habits back to pre-crisis levels."

"We are going to see more inflation in 2021, maybe 2.5% to 3%," St. Louis Federal Reserve President James Bullard said Tuesday.

"I expect some of that to hang on in 2022, maybe 2.5%," Bullard told CNBC at a time when markets show growing concerns about an inflation outbreak."

In company news, NortonLifeLock (NLOK) reported fiscal fourth-quarter sales and earnings that beat forecasts, unveiled a $1.5 billion share repurchase authorization while setting first-quarter guidance. Shares jumped by 10.8%, the most on S&P 500.

The worst performer on the index was HanesBrands (HBI), down 12%. The company said it will strategically invest in brands and e-commerce to deliver growth across owned channels and retail partnerships. It set out plans to increase sales to about $7.4 billion by 2024 from $6.25 billion in 2021.

In the precious metals markets, gold was slightly higher at $1,837.80, silver was up 0.9% to $27.75 an ounce and copper was up 1.7% to $4.80 per pound.