U.S. Stocks Turning In Lackluster Performance Ahead Of Inflation Data

After ending the previous session mostly lower, stocks are turning in a lackluster performance during trading on Wednesday. While the tech-heavy Nasdaq has slid firmly into negative territory, the Dow and the S&P 500 are lingering near the unchanged line.

In recent trading, the Nasdaq and S&P 500 have fallen to new lows for the session. The Nasdaq is down 111.93 points or 0.8 percent at 13,772.39, the S&P 500 is down 10.70 points or 0.2 percent at 4,488.68 and the Dow is down 13.73 points or less than a tenth of a percent at 35,300.76.

The choppy trading on Wall Street comes as traders seem reluctant to make significant moves ahead of the release of a key report on consumer price inflation on Thursday.

Economists expect the report to show consumer prices rose by 0.2 percent in July, matching the uptick seen in June. Core consumer prices, which exclude food and energy prices are also expected to rise by 0.2 percent for the second straight month.

The annual rate of consumer price growth is expected to accelerate to 3.3 percent in July from 3.0 percent in June, while the annual rate of core consumer price growth is expected to hold at 4.8 percent.

Traders will be looking for the report to reinforce expectations that the Federal Reserve will leave interest rates unchanged next month.

CME Group’s FedWatch Tool is currently indicating an 86.5 percent chance the Fed will leave rates unchanged in September.

Sector News

Computer hardware stocks are seeing substantial weakness on the day, resulting in a 4.0 percent nosedive by the NYSE Arca Computer Hardware Index.

A steep drop by Super Micro Computer (SMCI) is weighing on the sector, with the information technology company plunging by 23.2 percent after reporting better than expected fiscal fourth quarter results but providing disappointing revenue guidance for fiscal 2024.

Notable weakness is also visible among airline stocks, as reflected by the 1.4 percent loss being posted by the NYSE Arca Airline Index.

On the other hand, energy stocks are seeing considerable strength, moving sharply higher along with the price of crude oil.

With crude for September delivery jumping $1.47 to $84.39 a barrel, the Philadelphia Oil Service Index is up by 2.4 percent and the NYSE Arca Oil Index is up by 2.2 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index fell by 0.5 percent, while Hong Kong’s Hang Seng Index rose by 0.3 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index has jumped by 1.0 percent, the U.K.’s FTSE 100 Index is up by 0.9 percent and the German DAX Index is up by 0.7 percent.

In the bond market, treasuries are seeing modest strength after ending the previous session notably higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 1.2 basis points at 4.014 percent.

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