By Yasin Ebrahim
Investing.com — The Dow reversed gains to close lower Tuesday, as tech’s attempt to rebound failed following data that fueled debate on whether inflation was nearing a peak.
The Dow Jones Industrial Average slipped 0.26%, or 87 points, the S&P 500 fell 0.33%, and the Nasdaq fell 0.30%.
The consumer price index, or CPI, climbed to 8.5% in the 12 months through March, above economists’ forecasts of 8.4%, but it was the core CPI, which excludes food and energy, that dominated investor attention.
The core CPI rose 0.3% in March, slower than economists’ forecast for a rise of 0.5%, led by a “larger-than-expected decline in core goods prices alongside a surprising miss in rents,” Morgan Stanley said in a note.
Some on Wall Street aren’t getting carried away, warning that there is still a long way to go for inflation to return to the Federal Reserve’s 2% target.
“[W]hile today’s report is encouraging, the Fed is a long way away from claiming victory and will have to remain in inflation-fighting mode,” Jefferies said in a note.
U.S. Treasury yields took a breather following the data, briefly helping growth sectors of the market including tech catch a bid.
Energy stocks were the biggest gainer in the wake of surging oil prices as global demand worries eased after Shanghai curbed some of its Covid-19 restrictions.
Marathon Oil (NYSE:MRO), Devon Energy (NYSE:DVN), Diamondback Energy (NASDAQ:FANG) led the gains in the energy sector.
Losses in consumer discretionary stocks were limited by rising restaurant stocks after Citi highlighted Chipotle Mexican Grill (NYSE:CMG), Darden Restaurants (NYSE:DRI), and Texas Roadhouse (NASDAQ:TXRH) as opportunities with the most upside that can ride out the waning reopening boost and the impact of labor shortages.
CarMax (NYSE:KMX) fell more than 9% after reporting mixed quarterly results as earnings fell short estimates on declining sales volumes.
Bank stocks struggled a day ahead of JPMorgan (NYSE:JPM) quarterly results as falling Treasury yields weighed.
In other news, PG&E (NYSE:PCG) rose 3% after it agreed to pay a $55 million settlement over two fires in Northern California.
Sentiment was also hurt by fading hopes of the Russia-Ukraine ceasefire as both sides prepare for an intense battle in the eastern Ukraine region of Donbas.
Russia President Vladimir Putin said talks with Ukraine “have again returned to a dead-end situation for us” after Moscow was accused of committing war crimes in Bucha,