US inflation slowed less than expected to 8.3% YoY in Apr from 8.5%, indicating price growth may persist at elevated levels. Talks on a 75 bps hike revived, though not likely as traders raised bets that the Fed will roll out another half-point interest-rate hike in Sep, following similar increases in Jun and Jul.
US equities gave up early gains on Wed and closed in the red after elevated US inflation data bolstered the case for aggressive monetary-policy tightening. The Dow Jones Industrial Average lost 326.63 pts or 1.02% lower to close at 31,834.11. The broader S&P 500 index fell 1.65%. The tech-heavy Nasdaq Composite retreated 3.18%. The small-cap Russell 2000 dropped 2.48%.
Mega cap tech stocks fell on Wed, including Apple (AAPL US, -5.18%), Microsoft (MSFT US, -3.32%) Amazon (AMZN US, -3.20%), Alphabet (GOOGL US, - 0.69%), Nvidia (NVDA US, -5.48%), and Meta Platforms (FB US, -4.51%).
Walt Disney (DIS US, -2.29%) reported after the bell that its flagship streaming service gained more subscribers than estimated, allaying fears that its online TV business may be peaking after Netflix’s (NFLX US) surprised decline last month. Still, shares closed down 3.27% in after-hours trade.
The yield on the 10-year Treasury note slipped 7.01 basis points (bps) to 2.9207%, while the yield on the 2-year Treasuries rose 2.48 bps to 2.6371%.
The iShares iBoxx High Yield Corporate Bond ETF (HYG US) fell 0.60%.
The front-month Brent and WTI futures closed up $5.05 at US$107.51/bbl and $5.95 at US$105.71/bbl respectively on Wed.
The ICE dollar index (DXY), which measures the strength of the greenback against a basket of currencies, fell 0.07% to 103.846. The most actively traded US gold futures (Jun) contracts settled up $12.70, or 0.7%, at US$1,853.70/oz. July silver, which is the most actively traded silver futures, rose 15.2 cents, or 0.7%, to end at US$21.575/oz.
Bitcoin (XBTUSD) fell 8.38% on Wed, firmly below the psychological $30,000 level and the lowest since Jul 2021.
European equity markets finished higher on Wed. The UK FTSE gained 1.44%, France's CAC 40 rose 2.5%, while the German DAX advanced 2.17%.