Near record highs, US equity indices suffer minor losses.
Stocks are being weighed down by a strong US CPI and a disappointing bond auction ahead of Fed Chairman Powell’s speech.
JPMorgan Chase and Goldman Sachs were unable to applaud optimistic news, although PepsiCo benefited from high earnings.
On Wednesday, Citigroup, Wells Fargo, and Bank of America will report their earnings.
On Tuesday, US equity buyers relaxed their restraints after strong US inflation data and a dismal bond auction added to the market’s worries over the coronavirus (COVID-19).
Read more: Forex Today: The Dollar Strengthens as Inflation Rises
The US Consumer Price Index (CPI) increased from 4.9 percent to 5.4 percent YoY, while the core reading was also revised upwards from 3.8 percent to 4.5 percent, adding to the reflationary pressures. In addition, the market’s mood was pulled down by shockingly low demand for a 30-year bond auction. As a result, the 10-year Treasury yield increased by 5.5 basis points (bps) to 1.418 percent, putting a safe-haven bid under the US dollar index (DXY), causing it to rise to its highest level in a month.
Aside from fears of inflation and bond auctions, the coronavirus (COVID-19) weighed on investors’ minds. The current increase in covid variations in the Northern Hemisphere sheds light on the pandemic’s economic aftermath.
A fall in stocks was caused by traders’ rush to risk-safety. The Dow Jones Industrial Average (DJI) fell 0.31 percent to 34,888.79, or 107.39 points. Furthermore, the Nasdaq and S&P 500 both retreated from record highs, losing 55.6 and 15.42 points, respectively, or 0.38 and 0.35 percent, while ending around 14,677.70 and 4,370.
Despite surpassing market expectations for Q2 sales, JP Morgan Chase and Goldman Sachs both lost more than 1.0 percent, according to stock-specific information. Pepsi, on the other hand, climbed more than 2.0 percent as full-year economic predictions were revised upward.
Moving forward, global traders may keep an eye on the risk catalyst and Fed Chairman Jerome Powell’s hearing before the House Financial Services Committee on the Semi-Annual Monetary Policy Report./n
