(Bloomberg) -- Shares of technology companies traded off the highest levels of the day while the broader U.S. equity market rallied as signs of strengthening labor market helped to temper concern over increasing price pressures.Telsa weighed on the tech-heavy Nasdaq 100 after Chief Executive Elon Musk said the electric-vehicle manufacturer is suspending purchases using Bitcoin, triggering a slide in the digital currency. Financials and utilities helped the benchmark S&P 500 halt a three-day slide. Energy was the only one of the 11 market sectors to decline. A report earlier showed producer prices increased by more than forecast in April, and jobless claims fell. “Taking a step back from inflation, the fact that jobless claims hit another pandemic-era low suggests we’re inching even closer to full reopening, which is no doubt a good thing,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial.U.S. Producer Prices Top Forecasts, Adding to Inflation PressureConfidence that reigned supreme until two weeks ago on the U.S. economy and continued Federal Reserve stimulus has been jolted in the past week with non-farm payrolls falling far short of expectations and inflation rising by the most since 2009. While some investors insist the surge in consumer prices is a one-off reopening burst, the broader markets are hedging against the possibility it may persist and force the Fed to consider tapering its stimulus.“Markets have lost a little bit of confidence that the Fed has control of inflation” and the concern was that the central bank might wait too long to address the rise, Victoria Fernandez, Crossmark Global Investments chief market strategist, said on Bloomberg TV. “I am not sure the market is extremely comfortable with that at this point.”Musk tweeted that Tesla will no longer accept the digital currency for vehicle purchases due to environmental concerns.Alibaba dropped after reporting fourth-quarter results. While revenue beat estimates, the company posted a net loss after an antitrust fine.In Europe, earnings disappointments sent the benchmark gauge lower. BT Group Plc dropped as it missed estimates. Burberry Group Plc declined as guidance disappointed.Treasury markets were calmer, with the 10-year rate holding near 1.69%.Have your say on MLIV’s Question of the Day. Which Assets Hurt If CPI Isn’t Transitory?These are some of the main moves in markets:StocksThe S&P 500 rose 1.1%, more than any closing gain since April 23 as of 12 p.m. New York timeThe Nasdaq 100 rose 0.7%, more than any closing gain since May 7The Dow Jones Industrial Average rose 1.2%, more than any closing gain since March 26The Stoxx Europe 600 fell 0.1%The MSCI World index rose 0.2%, more than any closing gain since May 7CurrenciesThe Bloomberg Dollar Spot Index was little changedThe euro was little changed at $1.2068The British pound fell 0.2% to $1.4030The Japanese yen was little changed at 109.58 per dollarBondsThe yield on 10-year Treasuries declined three basis points, more than any closing loss since May 3Germany’s 10-year yield advanced zero basis points to the highest in more than 23 monthsBritain’s 10-year yield advanced one basis point, climbing for the fourth straight day, the longest winning streak since April 29CommoditiesWest Texas Intermediate crude fell 3.3%, the most since April 5Gold futures rose 0.1% to $1,826 an ounceFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
Aussie shares fell, with miners and tech stocks leading losses, as rising inflation in the US stoked concerns over sooner-than-expected rate hikes.
(Bloomberg) -- The S&P 500 Index slumped the most since February and bond yields jumped after a report showed inflation rose more than forecast, adding to concern that price pressures will stifle a recovery in the world’s biggest economy. The technology sector continued to lead the retreat in equities, with Apple and Microsoft pacing a 2.6% decline in the Nasdaq 100. Cathie Wood’s ARK Innovation ETF resumed its slide, bringing this year’s loss to about 18%. After closing at a record high on Friday, the benchmark S&P 500 dropped 2.14%. Energy was the only one of the 11 industry sectors to finish in the green. Treasury yields surged the most since March. “The markets have been hovering around all-time highs with a lot of the reopening trade already priced in,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial. “So it’s not out of the question that the outsized inflation read could bring us back down to earth a bit.”The debate over whether inflation will be persistent enough to force the Federal Reserve to tighten policy sooner than current guidance suggests comes as abundant stimulus has powered a rally in global equities, raising concerns valuations had become expensive. Fed Vice Chair Richard Clarida said he was surprised by the rise in consumer prices and “we would not hesitate to act” to bring inflation down to its goals if needed.The consumer price index increased 0.8% from the prior month after a 0.6% gain in March. Excluding the volatile food and energy components, the so-called core CPI rose 0.9% from March.“The CPI data point feeds into a myopic narrative that the U.S. is overheating and the Fed is one step away from tightening,” said Mike Bailey, director of research at FBB Capital Partners. “Bears will feast on this tightening theme in the short term, but my sense is inflation will prove fleeting and markets will revert back to a more bullish view of moderate growth and lower risk of Fed tightening until we get to a full recovery.”Elsewhere, the claim among advocates that Bitcoin is an inflation hedge appears to be in question after the CPI report. The digital asset slumped as much as 5.8% to around $53,600.European stocks closed mostly higher, lifted by optimism about economic re-openings and booming commodities.Copper and iron ore were on course for new records amid a broadening commodities boom. Oil was steady above $65 per barrel. The biggest U.S. pipeline is still closed in the wake of a cyberattack, leading to acute fuel shortages in some parts of the nation.MLIV’s Question of the Day: How Priced In Is a European Reopening?These are some of the main moves in markets:StocksThe S&P 500 fell 2.1%, more than any closing loss since Feb. 25 as of 4:04 p.m. New York timeThe Nasdaq 100 fell 2.6%, falling for the third straight day, the longest losing streak since May 5The Dow Jones Industrial Average fell 2%, more than any closing loss since Jan. 29The MSCI World index fell 1.7%, more than any closing loss since Jan. 29CurrenciesThe Bloomberg Dollar Spot Index rose 0.7%, more than any closing gain since April 30The euro slipped 0.6%, more than any closing loss since April 30The British pound slipped 0.6%, more than any closing loss since April 30The Japanese yen slipped 0.9%, more than any closing loss since March 4BondsThe yield on 10-year Treasuries advanced seven basis points, more than any closing gain since March 12Germany’s 10-year yield advanced four basis points, climbing for the sixth straight day, the longest winning streak since Feb. 8Britain’s 10-year yield advanced five basis points, more than any closing gain since March 12CommoditiesWest Texas Intermediate crude rose 0.8%, climbing for the fourth straight day, the longest winning streak since April 15Gold futures fell 0.9% to $1,820 an ounceFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.