Stocks fell in morning trading on Wall Street Friday, putting major indexes back into the red for the week after several sharp moves both up and down over the past few days
Stocks fell in morning trading on Wall Street Friday, putting major indexes back into the red for the week after several sharp moves both up and down over the past few days.
The S&P 500 fell 1.2% as of 10:19 a.m. Eastern. The Dow Jones Industrial Average fell 267 points, or 0.8%, to 33,651 and the Nasdaq fell 1.2%.
Major indexes have been shifting between slumps and rallies throughout the week as the latest round of corporate earnings hit the market in force. Investors have been reviewing a particularly heavy batch of financial results from big tech companies, industrial firms and retailers.
The volatile week caps off a dismal month for stocks as traders fret about the tough medicine the Federal Reserve is using in its fight against inflation: higher interest rates. That will increase borrowing costs across the board for people buying cars, using credit cards and taking out mortgages to buy homes. The S&P 500 is on track for a 6.7% loss for April, which would be its worst month since the beginning of the pandemic.
Internet retail giant Amazon slumped 11.7% after reporting a rare quarterly loss and giving investors a disappointing revenue forecast. The weak update from Amazon comes as Wall Street worries about a potential slowdown in consumer spending along with rising inflation.
Prices for everything from food to gas have been rising as the economy recovers from the pandemic and there has been a big disconnect between higher demand and lagging supplies. Russia’s invasion of Ukraine has only added to inflation worries as it drives price increases for oil, natural gas, wheat and corn.
The Commerce Department on Friday reported that an inflation gauge closely tracked by the Federal Reserve surged 6.6% in March compared with a year ago, the highest 12-month jump in four decades and further evidence that spiking prices are pressuring household budgets and the health of the economy.
The latest report on rising U.S. inflation follows a report from statistics agency Eurostat that shows inflation hit a record high in April of 7.5% for the 19 countries that use the euro.
Bond yields rose following the hot readings on inflation. The yield on the 10-year Treasury rose to 2.88% from 2.85%.
Persistently rising inflation has prompted central banks to raise interest rates in order to temper the impact on businesses and consumers. The Fed is set to aggressively increase rates as it steps up its fight against inflation. The chair of the Fed has indicated the central bank may raise short-term interest rates by double the usual amount at upcoming meetings, starting next week. It has already raised its key overnight rate once, the first such increase since 2018.