US stocks fall as inflation jumps to 40-year high; XOM, TSLA gain

Wall Street closed lower on Tuesday, April 12, after the latest economic data showed US inflation surged to a fresh 40-year high in March, driven by high energy and food costs.

The S&P 500 fell 0.34% to 4397.45. The Dow Jones declined 0.26% to 34220.36. The NASDAQ Composite was down 0.30% to 13371.57, and the small-cap Russell 2000 rose 0.33% to 1986.94.

The US consumer price index (CPI), which tracks the changes in the prices of goods and services over time, grew at an annual rate of 8.5% in March from 7.9% in the previous month. The Labor Department said it was the fastest pace of CPI growth since December 1981.

Economists said higher energy and food costs, global supply bottlenecks, and strong consumer demand accelerated the CPI growth last month, well above the Fed’s average 2% target.

Meanwhile, on Tuesday, the OPEC lowered its global growth forecast to 3.9% in 2022 from its previous estimate of 4.2% due to the high global commodity prices.

The cartel expects Russia’s oil production to top 10.8 million mbd in 2022, slightly higher than its 2021 output of 10.59 million. It said the US production to increase to 17.75 million mbd.

Prices of global benchmark, Brent crude, and the US standard WTI surged more than 6% after OPEC’s forecasts. Rising energy prices threatened to undermine growth.

The Ukraine war has also sent the prices of Pig iron, the raw material used in steel production, to record highs as supplies shrank, forcing the US steelmakers to look for new sources.

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Sectoral Performance

On Tuesday, energy, utility, consumer cyclicals, and consumer non-cyclicals were the top movers on the S&P 500 index. Financials, healthcare, technology, real estate, industrials, and basic material segments were the bottom movers. Four out of 10 segments closed in the green.

In energy sector, Exxon Mobil Corporation (XOM) rose 2.09%, Chevron Corporation (CVX) was up 2.08%, and Shell plc (SHEL) gained 1.21%.

In utilities, Duke Energy Corporation (DUK) was up 1.04%, The Southern Company (SO) rose 1.42%, and Duke Energy Corporation (DUK-PA) increased 0.35%.

In consumer cyclical stocks, Tesla, Inc. (TSLA) gained 1.13%, NIKE, Inc. (NKE) was up 0.05%, and Booking Holdings Inc. (BKNG) jumped 0.56%.

In consumer non-cyclicals sector, Walmart Inc. (WMT) was down 0.69%, The Procter & Gamble Company (PG) fell 0.30%, and Costco Wholesale Corporation (COST) decreased by 0.57%.

The cryptocurrency market was up 1.11% to US$1.85 trillion at around 4:50 pm ET on Friday. Bitcoin (BTC) was up 0.57% to US$39,731.75 in the last 24 hours.

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Futures & Commodities

Gold futures were up 0.96% to US$ 1,967.00 per ounce. Silver fell 0.02% to US$ 25.555 per ounce, while copper rose 0.02% to US$ 4.6932.

Brent oil futures fell 0.16% to US$ 104.87 per barrel and WTI crude fell 0.02% to US$ 100.97 a barrel.

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Bond Market

The 30-year Treasury bond yields slipped 0.54% to 2.806, while the 10-year bond yields dropped 1.98% to 2.727.

US Dollar Index Futures were up 0.39% to US$ 100.315.

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