US stocks turn lower ahead of CPI inflation data

US stocks continued to tread lower on Tuesday but bounced back from earlier session losses. The moves come as investors bide their time until a key inflation report lands and potentially sheds light on the path of interest rates.

The Dow Jones Industrial Average (^DJI) led the move to the downside, falling about 0.3%, or more than 100 points, in mid-afternoon trading. The benchmark S&P 500 (^GSPC) dropped about 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) hugged the flatline.

Stocks have become marooned ahead of the release of the Consumer Price Index on Wednesday, seen as a pivotal point for a market facing a slower next leg higher after a strong first quarter.

Investors have become increasingly less convinced the Federal Reserve will deliver on the three rate cuts it has projected for this year, given the persistent show of strength in the US economy. That has intensified the focus on the CPI print for March, and any sign that inflation has begun to cool again will be seen as an invitation for a June policy shift.

Meanwhile, fading rate-cut hopes have helped push up the 10-year Treasury (^TNX) yield near five-month highs — another potential headwind for stocks, with the 5% level seen as the key point of concern. The benchmark yield slipped about 5 basis points on Tuesday to trade around 4.4%.

At the same time, rising metals prices have sparked concerns about a feed-through effect on inflation. Copper (HG=F), a key industrial input, rose about 0.2% early Tuesday, adding to a 10% year to date gain that has prompted talk of a new bull market. Gold (GC=F) climbed above $2,360 an ounce, extending its rally to hit another fresh record.

Another catalyst on the horizon is the start of first quarter earnings season, which gets underway in earnest on Friday with results from the likes of Citigroup (C), JPMorgan (JPM), and Wells Fargo (WFC).

Live8 updates

Tue, April 9, 2024 at 10:00 AM PDT

Nvidia, Moderna, Alphabet: Stocks trending in afternoon trading

Here are the stocks trending on Yahoo Finance in afternoon trading on Tuesday:

Nvidia (NVDA): Shares of the chip giant fell nearly 3% after competitor Intel (INTC) revealed a new version of its artificial intelligence chip at its Vision event on Tuesday. According to the company, the new Gaudi 3 chip can train specific large language models 50% quicker than Nvidia’s prior generation H100 processor. Intel shares climbed about 1%.

Moderna (MRNA): Shares of the pharmaceutical giant jumped to a three-month high, up as much as 10%, after the company revealed positive responses in its early-stage cancer vaccine trial. The vaccine, developed with Merck, was used in patients with a type of head and neck cancer.

Alphabet (GOOG, GOOGL): Alphabet shares jumped more than 1% to trade near 52-week highs on Tuesday. The moves come after the tech company announced a new video-creation app, Google Vids, which utilizes artificial-intelligence to streamline content development.
Tue, April 9, 2024 at 9:15 AM PDT

Commodities check: Gold, oil prices surge

Commodities prices are surging as gold (GC=F) hits another record high while the debate intensifies about whether or not oil prices will reach $100 a barrel.

The price of gold has risen over the past eight trading sessions, despite recently revised expectations that there may be less interest rate cuts than initially anticipated this year.

In a note published on Monday, Bank of America said the price of gold could rally to $3,000 per ounce by 2025. Prices are currently trading above $2,380 an ounce.

Meanwhile, energy prices remain a key risk to inflation after serving as the largest contributor to headline CPI numbers over the past several months.

WTI crude oil (CL=F) is currently trading around $86 a barrel while Brent crude prices (BZ=F) have climbed above $90 a barrel.

“Brent has rallied to $91/bbl because the market is now pricing in a firmer demand outlook and some geopolitical downside risks to oil supply, which together have boosted positioning and valuation,” Goldman Sachs said in a new research note published on Sunday.

Still, the team does not see prices rising to $100 this year, largely due to solid demand expectations and no additional geopolitical supply hits.

(Source: Goldman Sachs)
Tue, April 9, 2024 at 8:30 AM PDT

Worried about a recession this year? This economist is….

Here is a word we haven’t heard tossed around by economists for more than a year: recession.

But it may come back into the market debate at some point this summer, especially if interest rates aren’t cut and do in fact stay higher for longer.

I just had a coffee chat with Visa’s awesome economist Wayne Best here at Yahoo Finance’s NYC headquarters — and was really impressed by the work his team is doing on consumers.

He showed me one chart his team recently developed looking at recession risks for this year by state. California was one of those areas at risk (as were many others), in part due to hikes caused by higher hourly wages Best explained. Elevated interest rates could also be a contributor.

Having said that, don’t expect a recession tomorrow. Visa’s data is showing a strong propensity to travel and spend on services in coming months. It’s just a nuance nobody is talking about in markets right now, hence I wanted to put on your radar today!
Tue, April 9, 2024 at 7:47 AM PDT

Stocks reverse earlier gains

All three major indexes reversed earlier session gains on Tuesday — just ahead of Wednesday’s critical CPI report.

The Dow Jones Industrial Average (^DJI) led the move to the downside, falling about 0.7%, or more than 250 points. The benchmark S&P 500 (^GSPC) dropped about 0.6%, while the tech-heavy Nasdaq Composite (^IXIC) slipped roughly 0.3%.
Tue, April 9, 2024 at 7:15 AM PDT

Could no rate cuts be on the table?

Markets are anticipating just two and a half 25 basis point cuts this year, down from the six cuts expected at the start of the year, according to Bloomberg data.

As investors weigh recent Fed speak and adopt a “higher for longer” interest rate mentality, a key question has emerged: Does the US economy even need rate cuts?

“[The Fed] wants to cut rates, but the economy is standing in its way,” Mizuho Securities USA chief economist Steven Ricchiuto told Yahoo Finance Live early Tuesday. “The Fed is fighting the economy. In particular, they’re fighting the American consumers, and that’s a fight that I would not want to get involved in.”

Ricchiuto, who does not expect the central bank to cut interest rates this year, added there are certain risks to the upside if interest rates remain unchanged.

“If the Federal Reserve was to cut interest rates without the data justifying it, then you could get into an environment where you begin to embed a 3% inflation psychology into the marketplace as opposed to a 2% inflation psychology,” he explained. “That laterally shifts up the fair value trading range of the 10-year note.”

The 10-year Treasury (^TNX) yield is currently hovering near five-month highs, with the 5% level seen as the key point of concern.

If Treasury yields rise, “that’s a real problem in terms of the outlook for the overall economy because clearly, that will have significant negative effects on the ability of households to purchase homes,” Ricchiuto argued.

“The Fed is fighting the economy, in particular, they’re fighting the American consumers, and that’s a fight that I would not want to get involved in,” Mizuho Securities USA chief economist Steven Ricchiuto says. pic.twitter.com/yG3eo5yPRZ

— Yahoo Finance (@YahooFinance) April 9, 2024
Tue, April 9, 2024 at 6:33 AM PDT

US stocks rise as investors await critical inflation data

US stocks climbed higher on Tuesday as investors await key CPI data, due Wednesday morning.

The benchmark S&P 500 (^GSPC) climbed about 0.4%, while the tech-heavy Nasdaq Composite (IXIC) jumped roughly 0.5%. The Dow Jones Industrial Average (^DJI) added about 0.1%, or roughly 50 points.

Meanwhile, fading rate-cut hopes have helped push up the 10-year Treasury (^TNX) yield near five-month highs. The benchmark yield slipped about 3 basis points on Tuesday to trade around 4.4%.
Tue, April 9, 2024 at 3:08 AM PDT

Teens clamp down on spending, but not everywhere

Teens are tightening up their spending, according to Piper Sandler’s latest ‘Taking Stock’ research out this morning.

The spring survey showed that teen “self-reported” spending fell 6% year over year to $2,263, and rose only by 1% from the fall.

The biggest category winner is cosmetics.

Spending on beauty hit the highest level since spring 2018, interesting in the sense that Ulta (ULTA) CEO David Kimbell warned last week of an industry slowdown (his stock price was clobbered). E.l.f. Beauty (ELF) gained the most market share relative to its competitors, the survey showed.

Teens clamp down on their spending. (Piper Sandler)
Tue, April 9, 2024 at 3:00 AM PDT

The PC recovery continues

Keep an eye on shares of PC makers Dell (DELL) and HP Inc. (HP) today.

PC industry firm Canalys said Tuesday that total shipments of desktops and notebooks grew 3.2% annually to 57.2 million units in the first quarter. The research outfit says this is a sign of demand building ahead of catalysts coming later this year, such as the arrival of AI PCs and the Windows 11 refresh.

“Growth in the first quarter of 2024 bodes well for a strong PC market throughout the year,” said Ishan Dutt, principal analyst at Canalys. “Vendors and the channel have been working through some final stages of inventory corrections, and macroeconomic conditions in certain markets continue to limit demand. But the strength of the refresh opportunity, particularly from businesses, is beginning to come to the fore. The market is set to go from strength to strength in the coming quarters as customers prioritize upgrades in preparation for a large-scale transition to Windows 11.”

The PC recovery continues on. (Canalys)