Sheets of one-dollar bills run through the printing press.
Mark Wilson/Getty ImagesGlobal stocks slid on Wednesday, but came off the worst levels of the day, on worries over inflation and whether the Federal Reserve might indicate it will lift interest rates sooner rather than later.
Markets are waiting on the minutes of the Federal Reserve’s latest meeting due later.
By midday, the Dow Jones Industrial Average fell 268 points, or 0.8%, while the S&P 500 was down 0.7% and the Nasdaq Composite dropped 0.6%. Major U.S. stock indexes finished lower on Tuesday, as enthusiasm over a strong batch of retailer earnings competed with concerns over lofty valuations and signs of some inflationary pressures. Weaker-than-expected housing data didn’t help.
A weak day in Asia saw the Nikkei 225 drop 1.3% and Australia’s S&P/ASX 200 benchmark lose nearly 2%. The Stoxx Europe 600 slid 1.5%, with commodity and tech stocks driving losses.
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“Most investors could no longer turn a blind eye on rising inflation, knowing that the taper conversation will have to happen sooner rather than later,” writes Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
The minutes of the Federal Open Market Committee meeting of Apr. 27-28 will be released later on Wednesday, with investors looking for any hints the central bank could be considering a shift in its accommodative monetary stance.
U.K. data showed consumer prices rose 1.5% on the year in April, twice the rate of inflation reported in March, according to the Office for National Statistics.
Oil prices were also under pressure, with crude and Brent futures dropping nearly 3% each. Those losses came after data from the American Petroleum Institute reportedly showed an unexpected rise in U.S. crude supplies, and amid reports of potential progress on Iranian nuclear talks.
And Bitcoin prices were sliding after dropping below the $40,000 level earlier on Wednesday, following the People’s Bank of China’s warning that digital currencies can’t be used as payments.
Technology names were under pressure, with heavily weighted semiconductor equipment provider ASML Holding dropping 0.7% on the Nasdaq. Shares of German business software group SAP fell 0.8% in U.S. trade.
Shares of John Laing surged 11% in London, after New York private-equity firm KKR & Co. KKR said it has agreed to buy the U.K.-listed infrastructure investor and manager for £2 billion ($2.84 billion) in cash.
Reata Pharmaceuticals (ticker: RETA) stock rose 22% after the company said it is withdrawing its Food and Drug Administration application for a drug, filing a new application instead.
Tyson Foods (TSN) stock slipped 1.3% even after getting upgraded to Buy from Hold at Argus.
Salesforce.com (CRM) stock gained 2.8% after getting upgraded to Overweight from Equal Weight at Morgan Stanley.
Ross Stores (ROST) stock rose 0.2% after getting upgraded to Buy form Neutral at Northcoast.
Wells Fargo & Co. (WFC) stock dropped 1.5% after getting downgraded to Neutral from Buy at UBS.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
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May 19, 2021 at 11:50PM
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Why Is the Stock Market Down Today? Inflation Worries Spook Investors. - Barron's
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