S&P 500 and Nasdaq Faced Headwinds After Stubborn Inflation Data

Barry Adams
12 Oct, 2023
New York City

Stocks lacked direction and investors reviewed the latest inflation report. 

Market indexes  were little changed after consumer price inflation held steady in September on an annual basis but rose from the previous month in September. 

Despite the weakening inflation, prices are still rising at faster than 2% target rate set by the Federal Reserve, supporting the case for higher interest rates through 2024. 

A separate report showed that initial jobless claims were unchanged from the previous week at 209,000 in the week ending October 7, the U.S. Department of Labor reported Thursday. 

The weekly claims were near the seven-month low of 202,000, indicating tight labor market conditions and supporting the case of higher interest rates through 2024.  

Continuing claims rose 30,000 from the previous week to 1.702 million.

 

Overall Inflation Held Steady In September 

The Consumer Price Index, a measure of overall inflation, rose 0.4% in September and jumped 3.7% from a year ago, the U.S. Bureau of Labor Statistics reported Thursday. 

Core inflation, which excludes volatile food and energy prices, rose 4.1% from a year ago, the slowest pace of increase since September 2021. 

On a monthly basis, overall consumer price inflation declined to 0.4% from 0.6% increase in the previous month and core inflation held steady at 0.3%. 

 

U.S. Indexes & Yields 

The S&P 500 index increased 0.1% to 4,381.14 and the Nasdaq Composite rose 0.1% to 13,673.63. 

The yield on 2-year Treasury notes increased to 5.06%, 10-year Treasury notes inched higher to 4.61% and 30-year Treasury bonds held at 4.75%. 

Crude oil prices were in focus on the worries that the latest  flare up between Israel and Hamas may spread to neighboring oil producing states and disrupt global oil supply. 

Crude oil decreased $1.67 to $85.16 a barrel and natural gas prices eased 4 cents to $3.32 a thermal unit. 

The dollar index edged higher to 105.07, the level last seen in November 2022 and extended gains from the low of 99.85 on July 13, 2023.  

 

U.S. Stock Movers 

Delta Air Lines jumped 3% to $37.10 after the international carrier said third-quarter earnings soared 60% from a year ago on strong travel demand.  

Walgreens Boots Alliance increased 0.8% to $22.89 after the retail pharmacy chain reported mixed quarterly results and forecasted weak annual earnings growth outlook. 

Ford Motor Company declined 2.2% to $11.98 after United Auto Workers expanded its strike to a key plant in Kentucky where the company builds popular SUVs. 

Domino's Pizza Inc declined 3.4%  to $346.50 after the food company reported weaker-than-expected earnings and sales at U.S. comparable locations declined 0.6%.