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US indices closed the week sharply lower on Friday, June 10, after the latest CPI data showed inflation surged at an annual pace of 8.6% in May, triggering a panic selloff in growth stocks.
The S&P 500 fell 2.91% to 3,900.86. The Dow Jones decreased by 2.73% to 31,392.79. The NASDAQ Composite dropped 3.52% to 11,340.02, and the small-cap Russell 2000 fell 2.73% to 1,800.28.
The US inflation rose 1.0% in May on a seasonally adjusted basis, from an increase of 0.3% in the prior month, the Labor Department said on Friday. On an annual basis, the May CPI climbed 8.6%, the biggest increase since 1981, following a rise of 8.3% in April.
The 10-year Treasury bond yields rose as much as 3.92% to 3.161, its highest level since May 9, after the CPI data, delivering a major blow to growth stocks.
Investors feared the central bank might take a tougher stance to rein in the piping hot inflation. The Fed is considering a sequential increase of 50 basis points in interest rates in June and July. It is expected the announce the June revision next week.
The interest rates were already raised by 25 and 50 basis points in March and May.
In the stock market, all the 11 segments of the S&P 500 index stayed in the negative territory. The consumer discretionary, technology and financial sectors were the worst performers.
Video-streaming service company Netflix, Inc. (NFLX) stock fell 4.74% after Goldman Sachs downgraded the stock, concerned over its resilience in a gloomy macroeconomic environment.
Shares of software developer DocuSign, Inc. (DOCU) declined 24% after missing quarterly estimates and predicted slow growth. The company also said that it stopped new hiring.
Personal styling services firm Stitch Fix Inc. (SFIX) stock plummeted 17% after providing weak guidance and quarterly results. It also said that it would trim around 15% of its workforce.
In the consumer discretionary sector, Amazon.com, Inc. (AMZN) decreased by 5.60%, Tesla, Inc. (TSLA) fell by 3.26%, and The Home Depot, Inc. (HD) tumbled by 3.13%. Toyota Motor Corporation (TM) and Nike, Inc. (NKE) ticked down 1.58% and 2.96%, respectively.
In technology stocks, Apple Inc. (AAPL) declined 3.41%, Microsoft Corporation (MSFT) plunged 4.00%, and NVIDIA Corporation (NVDA) plummeted 5.80%. Broadcom Inc. (AVG) and ASML Holding N.V. (ASML) slipped 2.25% and 3.81%, respectively.
In the financial services sector, Berkshire Hathaway Inc. (BRK-A) dropped 2.50%, Visa Inc. (V) fell 2.83%, and JPMorgan Chase & Co. (JPM) decreased by 4.33%. Bank of America Corporation (BAC) and Mastercard Incorporated (MA) retreated 3.65% and 3.74%, respectively.
In the crypto space, Bitcoin (BTC) and Ethereum (ETH) plummeted by 3.62% and 6.40%, respectively. The global crypto market cap slumped 3.80% to US$1.19 trillion at 3:52 pm ET on June 10.
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Futures & Commodities
Gold futures were up 1.22% to US$1,875.45 per ounce. Silver increased by 0.48% to US$21.922 per ounce, while copper fell 2.26% to US$4.2822.
Brent oil futures decreased by 0.98% to US$121.86 per barrel and WTI crude was down 0.83% to US$120.50.
Also Read: US retailers rush to slash prices to downsize inventory
Bond Market
The 30-year Treasury bond yields were up 0.93% to 3.199, while the 10-year bond yields rose 3.98% to 3.163.
US Dollar Futures Index increased by 0.95% to US$104.200.
