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US stocks edge lower, Nasdaq slips below 12,000, ahead of key inflation number

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US stocks edged modestly lower on Thursday, with the Dow falling 150 points, as investors look ahead to a reading on May inflation due Friday morning.

The S&P 500 index fell for a second day with 9 out of 11 sectors losing ground.

What’s happening
  • The Dow Jones Industrial Average DJIA
    was down 150 points or 0.5% to 32,756

  • The S&P 500 SPX
    was down 29 points or 0.7% to 4,085.

  • The Nasdaq Composite COMP
    was down 121 points, or 1%, at 11,970.

On Wednesday, the Dow Jones Industrial Average DJIA
fell 269 points, or 0.81%, to 32911, the S&P 500 SPX
declined 45 points, or 1.08%, to 4116, and the Nasdaq Composite COMP
dropped 89 points, or 0.73%, to 12086.

US stock indexes remained locked in a tight range: the S&P 500 hasn’t traded above 4,177.51 or below 4,073.85 this month.

What’s driving markets

Investors are focusing on a potential slowdown in economic growth in the wake of the Federal Reserve’s monetary policy tightening with the May consumer price index report due Friday.

Supply disruptions in the wake of the pandemic and the war in Ukraine, along with a revival in consumer demand for services rather than goods, have pushed prices up at the fastest pace in about forty years.

The consumer price index is expected to show a large 0.7% increase when the report is released Friday morning – more than double the gain in the prior month. In April, the yearly rate fell for the first time in eight months to 8.3%. The prior 8.5% reading in March was the biggest since December of 1981.

See: US didn’t get any relief from high inflation in May – CPI to show another big gain

In US economic data Thursday, total household net worth fell $ 5.4 billion to $ 149.2 trillion in the first quarter, according to Fed data. It was the first drop after seven straight quarters of expansion, coming as the value of stock holdings tumbled in 2022, but as home values ​​continued to add gains.

Also, the number of Americans filing for unemployment insurance showed more newly unemployed workers asking for benefits than at any time during the past five months. New filings for unemployment benefits jumped by 27,000 last week to a five-month high of 229,000, but almost the entire increase appeared to stem from seasonal quirks tied to the Memorial Day holiday.

Earlier Thursday, US stocks followed European equities lower Thursday, after the European Central Bank affirmed that next month it would halt asset purchases and raise interest rates for the first time in more than a decade.

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“US stocks declined as global bond yields rose after the ECB prepared markets for a rate hiking cycle and on growing nervousness that tomorrow’s CPI data will clearly show inflation isn’t near peaking,” said Edward Moya, Senior Market Analyst for the Americas at OANDA .

“Warning signs about the economy are emerging as weekly jobless claims are starting to rise, China’s COVID situation will prove troublesome for supply chains over the next couple of quarters, and as inflationary pressures broaden and show no sign of easing,” he said.

Companies in focus
  • Meta Platforms Inc.. TARGET,
    the Mark Zuckerberg company behind Facebook, changed its ticker symbol from FB to META. Shares were down 3.6% Thursday, adding to its roughly 44% plunge on the year.

  • Walt Disney Company
    DIS
    shares were down 2.3% after the company said it was tapping Dana Walden as chairman of Disney General Entertainment Content, where she will succeed Peter Rice, one of the company’s top television executives.

  • Tesla TSLA, the electric vehicle leader, rose 1.5% after UBS upgraded the stock to buy from neutral while leaving the price target of $ 1,100 unchanged.

  • NXP Semiconductors
    NXPI
    was one of the market’s best performers, rising 6.6%, on reports of a potential takeover by Samsung.

  • Shares of several COVID vaccine makers were down sharply on Thursday, including ModernMRNA
    and Novavax
    NVAX.
    The latter was down 16.3% on worries that the FDA might delay approval of its booster shot.

Other market action
  • The US dollar DXY
    gained against a basket of rival currencies, up 0.6%.

  • Treasury yields rose, with the 10-year BX: TMUBMUSD10Y
    near 3.03%, holding above the critical 3% threshold.

  • Crude oil prices CL
    eased on Thursday following Wednesday sharp move higher, as front-month futures for WTI crude, the US benchmark, down 0.3% to $ 121.75 per barrel.

–Steve Goldstein contributed reporting to this article

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