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Stock Market Today: Dow Slips to Fresh 2022 Low as Inflation Keeps Tech in Wreck

Stock Markets May 11, 2022 04:04PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com -- The Dow plunged to fresh lows for the year Wednesday as an ugly reversal in tech fueled a broader selloff after data showing inflation remains near 40-year highs stoked fears of more aggressive Federal Reserve rate hikes.

The Dow Jones Industrial Average slipped 1.1%, or 342 points, the S&P 500 fell 1.7%, and the Nasdaq fell 2.3%.

The Labor Department said Wednesday its consumer price index slowed to 0.3% last month from 1.2% previously, exceeding forecasts for a slowdown to a 0.2% rise. Consumer prices in April year-on-year slowed to 8.3% from 8.5%.

Ahead of the report, many economists were expecting that inflation was nearing a peak, but the latest reading is likely to persuade the Federal Reserve to lean more hawkish on monetary policy.

“Powell said last week that the Fed wasn't seriously considering a 75bp increase at the next two meetings. After today's CPI report, it may warrant some consideration,” Jefferies said in a note.

"The Fed is walking this fine line between pushing the economy into recession, and pushing down inflation," Melissa Brown, managing director of applied research at Qontigo, an index and analytics provider, said in an interview with Investing.com on Wednesday. "I think that that line has gotten finer."

Against the backdrop of growing bets on a more aggressive Fed, big tech gave up their gains and resumed their selloff.

Apple (NASDAQ:AAPL) fell 5%, a move that saw the tech giant relinquish its crown as the most valuable company to Saudi Aramco (TADAWUL:2222). 

Rising energy stocks, however, attempted to limit downside momentum in the broader market, underpinned by gains in the Occidental and a jump in oil prices on fresh supply fears. Ukraine suspended gas flows to Europe via a major transit point, located in the Donbass region, blaming Russian interference.

Occidental Petroleum (NYSE:OXY) gained more than 1% after reporting better-than-expected quarterly results as rising energy prices bolstered growth.

Coinbase Global (NASDAQ:COIN), meanwhile, reported first-quarter revenue that fell short of expectations as the rout in cryptocurrencies including bitcoin and lower market volatility weighed on growth. Its shares fell more than 26%.

There remain some on Wall Street who believe the long-term investment case for Coinbase is intact even as the cryptocurrency trading platform flagged slower growth in the coming quarters.

Oppenheimer cut its price target on the stock to $197 from $314, but pointed to positive fundamentals including ongoing crypto adoption and the company’s strong balance sheet that ensure the long-term investment case on Coinbase remains intact.

Unity Software (NYSE:U) delivered a softer growth outlook ahead and first-quarter results that fell short of Wall Street estimates, sending its shares tumbling 37%.

But there were some bright spots on the earnings front.  

Krispy Kreme (NASDAQ:DNUT) reported quarterly results that beat on both the top and bottom lines, sending its shares climbed by more than 3% higher. Roblox (NYSE:RBLX), meanwhile, shrugged off softer first-quarter results to rise more than 3%.

Stock Market Today: Dow Slips to Fresh 2022 Low as Inflation Keeps Tech in Wreck
 

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Comments (9)
ZS Beck
ZS Beck May 11, 2022 9:00PM ET
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Biden's builds-back better plan doesn't seem to be working. It's more plan B, like how to train wreck the US
Junk Man
Junk_Man May 11, 2022 8:39PM ET
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People seem to be getting by. The Biden/media lies can last a couple years. By that time, Biden will ****** China into a conflict and then blame it on Russia and China...
Steve Miller
Steve Miller May 11, 2022 7:50PM ET
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here is how to calculate future inflation rates. take Joe Biden's current age and divide it bye is i q of 10 and then add the number of Lies he is told in the past two weeks which is 100 and that is the inflation rate 2 years from now. better buckle up buckaroos because it's going to get dicey
Millennial Stacker
Millennial Stacker May 11, 2022 6:53PM ET
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Hyperinflation is coming
Rob Stone
Rob Stone May 11, 2022 5:31PM ET
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It's what happends when you print 60% of the total dollars in the last 2 years. people are getting what they voted for!!!
Casador Del Oso
Casador Del Oso May 11, 2022 5:11PM ET
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It's just the beginning folks. Those feeble interest rate hikes will do little to slow inflation. I was a teenager in the 1970s and remember well the pain inflation inflicted on everyone.
Liam LL
Liam LL May 11, 2022 5:11PM ET
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What happened to stock then? Dropped to less than half?
William Bailey
William Bailey May 11, 2022 5:11PM ET
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Yep!! Pain just starting
John Wim
John Wim May 11, 2022 4:50PM ET
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The voters got what yhey deserve. We had such a nice period between 2017-2021. They just couldn’t stand the good times. So here we are military conflict in Europe, major inflation over here. I just pumped gas today $5.99 a gal.
Mike Simms
Mike Simms May 11, 2022 4:50PM ET
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You got it right. In a democracy, people get the leadership they deserve.
Keith Wilson
Keith Wilson May 11, 2022 4:50PM ET
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Anyone down voting this post is nothing more than a Liberal hack
Gerald Zipay
Gerald Zipay May 11, 2022 4:50PM ET
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so says the wannabe insurrectionist lol
Jimmy Smith
Jimmy Smith May 11, 2022 4:45PM ET
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Biden is the BEST ever! Hopefully this trend continues for two solid terms. All of the peace and prosperity under Trump was just too much!
Keith Wilson
Keith Wilson May 11, 2022 4:45PM ET
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I agree. This misery under Biden is GREAT!!!
Leo DeMarco
Leo DeMarco May 11, 2022 4:45PM ET
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Peace and prosperity, thanks for the laugh. It will be great to see Trumpee behind bars.
Meru Pet
Meru Pet May 11, 2022 4:32PM ET
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tech in wreck ... Come on, people are just playing the chart...
 
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