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S&P 500 Deepens Losses as Growth Stocks Skid Ahead of Inflation Data

Stock Markets Jun 09, 2022 03:11PM ET
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© Reuters

By Yasin Ebrahim

Investing.com -- The S&P 500 deepened losses on Thursday as investors remain wary of bullish bets on stocks ahead of an inflation report that could embolden the Federal Reserve to stick with its aggressive plans to tighten monetary policy measures.

The S&P 500 fell 1.4%, the Dow Jones Industrial Average slipped 1.1%, or 350 points, and the Nasdaq was down 1.8%.

Growth stocks continue to pile on the pressure, led by Netflix (NASDAQ:NFLX) and META, with the latter enduring a downbeat start to life under its new ticker “META.”

Rising Treasury yields continue to cast doubt on growth areas of the market including big tech as investors await inflation data due Friday that will filter into the Fed’s thinking about the path of rate hikes.

“They need more data…the CPI for June and for July will help the Fed get real clarity as to what's going to happen with inflation,” Robert Conzo, CEO of The Wealth Alliance told Investing.com in an interview on Thursday. 

Economists expect that inflation rose about 0.7% in May, faster than 0.3% in April, but price pressure is expected to remain flat for the 12 months through May at 8.3%. 

If the CPI continues to tick down and inflation starts to quell…then they [the Fed] should hold off on some of the future interest rate hikes," Conzo added. "Depending on the trajectory and how fast inflation falls will give us more clarity on the likelihood of a recession."

Stitch Fix (NASDAQ:SFIX), meanwhile, was the latest company to flag inflation pressures, with the retailer reportedly set to cut 15% of its salaried workforce, CNBC reported, citing an internal memo.

Tesla (NASDAQ:TSLA) gave up some gains, but dodged the broader market selloff following UBS's upgrade to buy from neutral, citing attractive valuations.  

Five Below (NASDAQ:FIVE) fell more than 8% after cutting full-year guidance following mixed quarterly results that missed on the top line.

Financials were also in the red, paced by a decline in banks as worries about a softer economy continue to flatten the yield curve, which tends to dent net interest margin, and limits the profit banks make from lending.

Capital One Financial (NYSE:COF), Wells Fargo (NYSE:WFC), Bank of America Corp (NYSE:BAC) were among the biggest decliners, falling more than 3%.

S&P 500 Deepens Losses as Growth Stocks Skid Ahead of Inflation Data
 

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Comments (6)
James Johannsen
James Johannsen Jun 09, 2022 4:06PM ET
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12 or 13%, real numbers above 20%
Mart Bab
Rubberduck1973 Jun 09, 2022 4:01PM ET
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If you are a so called investor and you believe the FED will have a break/ pause from hiking, I really think it’s time to get another job or hobby for yourself. Imagine you are the FED. You have out of control inflation on your hands and are trying everything to manufacture a smooth landing. The only tool you have is the narrative you put out. Really. Think about it. You have to hike. You don’t want to scare. What would your actions be and what would your narrative be? If you don’t understand this, sell your stock and go home. You are delaying the imminent correction and therefore waisting everyone’s time.
Dave Jones
Dave Jones Jun 09, 2022 3:58PM ET
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The guy in the photo has the audacity to wear the American flag yet all WS wants is free money even at the destruction of the economy they are supposed to support. base tirds.
Jun 09, 2022 3:50PM ET
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1930 style crash coming. People are going to lose everything
Dominic Mazoch
Dominic Mazoch Jun 09, 2022 3:43PM ET
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If companies need money, sell the stocks they bought back. To me, buybacks should be made illegal.
Mart Bab
Rubberduck1973 Jun 09, 2022 3:40PM ET
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Like i said. Buy gold now. It’s not a hedge against inflation. It’s risk management. We are in a minefield market for the next 12 months
Mart Bab
Rubberduck1973 Jun 09, 2022 3:40PM ET
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Psssdt. Gold is also a hedge against inflation . But people don’t seem to understand what inflation is
 
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