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US stocks closed lower on Wednesday, July 13, after June CPI inflation surged to a new record of 9.1%, the highest level since 1981, suggesting that the Federal Reserve would continue to tighten its monetary policy to calm price rise.
The S&P 500 fell 0.45% to 3,801.78. The Dow Jones was down 0.67% to 30,772.79. The NASDAQ Composite lost 0.15% to 11,247.58, and the small-cap Russell 2000 ticked down 0.12% to 1,726.04.
The Labor Department on Wednesday said that CPI inflation in June climbed to 9.1% after increasing 8.6% in May, far above analysts' expectations, fuelled by higher gasoline and food prices. The data stifled expectations of a quick recovery.
On a month-on-month basis, CPI rose 1.3% in June, following a 1% rise in the previous month. The so-called core CPI, which excludes the volatile food and energy components, ticked up 0.7% in June from the prior month, and 5.9% annually.
Traders anticipate more rate hikes as consumer prices continue to advance unrestrained. They expect Fed to announce another 75 basis point increase in July following a similar rise in June, which deepened fears of a potential recession.
Against this background, six of the 11 segments of the S&P 500 index stayed in negative territory on Wednesday. Consumer discretionary and consumer staples were the top gainers. Healthcare and industrial sectors were the laggards.
Delta Air Lines, Inc. (DAL) stock declined 5.18% after its quarterly earnings missed Wall Street estimates. It posted a net income of US$735 million despite rising operational costs.
Unity Software Inc. (U) stock tumbled nearly 17% in intraday trading after agreeing to merge with app firm ironSource Ltd (IS). The IS stock gained 54.26%.
Shares of Twitter Inc. (TWTR) soared 7.90% after investment research firm Hindenburg Research LLC said it took a long position in the social media company.
In the consumer discretionary sector, Amazon.com, Inc. (AMZN) increased by 1.11%, Tesla, Inc. (TSLA) rose 1.92%, and Nike, Inc. (NKE) surged 1.41%. Lowe's Companies, Inc. (LOW) and JD.com, Inc. (JD) advanced 1.02% and 3.07%, respectively.
In the consumer staples sector, Diageo plc (DEO) gained 1.17%, The Estée Lauder Companies Inc. (EL) soared 1.02%, and The Kraft Heinz Company (KHC) added 1.34%. Constellation Brands, Inc. (STZ) and Dollar Tree, Inc. (DLTR) ticked up 1.96% and 1.13%, respectively.
In healthcare stocks, UnitedHealth Group Incorporated (UNH) decreased by 2.05%, Thermo Fisher Scientific Inc. (TMO) fell 1.60%, and Abbott Laboratories (ABT) declined 1.80%. Novartis AG (NVS) and CVS Health Corporation (CVS) tumbled 1.04% and 1.22%, respectively.
In the crypto space, Bitcoin (BTC) and Ethereum (ETH) gained 1.67% and 3.99% in the last 24 hours, respectively. The global crypto market cap rose 1.57% to US$882.83.03 billion at 3:40 pm ET on July 13.
Futures & Commodities
Gold futures were up 0.47% to US$1,732.90 per ounce. Silver increased by 1.02% to US$19.152 per ounce, while copper rose 0.81% to US$3.3142.
Brent oil futures decreased by 0.03% to US$99.46 per barrel and WTI crude was up 0.26% to US$96.09.
Bond Market
The 30-year Treasury bond yields were down 1.58% to 3.087, while the 10-year bond yields fell 1.45% to 2.915.
US Dollar Futures Index decreased by 0.07% to US$107.832.
