After trending higher over the past several sessions, stocks gave back some ground during trading on Wednesday. The tech-heavy Nasdaq led the way lower, while the Dow and the S&P 500 pulled back off Tuesday’s record closing highs.
The Nasdaq climbed well off its worst levels of the day but still closed down 115.10 points or 0.6 percent at 19,060.48. The Dow fell 138.25 points or 0.3 percent to 44,722.06 and the S&P 500 (SPI:SP500) slid 22.8 points or 0.4 percent to 5,998.74, snapping a seven-session winning streak.
The pullback by the Nasdaq came amid substantial weakness among computer hardware stocks, with the NYSE Arca Computer Hardware Index plunging by 3.3 percent.
PC makers Dell Technologies (NYSE:DELL) and HP Inc. (NYSE:HPQ) plummeted by 12.3 percent and 11.4 percent, respectively, after providing disappointing earnings guidance.
Significant weakness was also visible among software stocks, as reflected by the 1.6 percent loss posted by the Dow Jones U.S. Software Index.
Weakness among semiconductor and networking stocks also weighed on the Nasdaq, while biotechnology stocks showed a strong move to the upside.
The weakness in the broader markets came after the Commerce Department released closely watched consumer price inflation data that matched expectations.
The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.2 percent in October, matching the uptick seen in September as well as economist estimates.
The annual rate of growth by the PCE price index accelerated to 2.3 percent in October from 2.1 percent in September, which was also in line with expectations.
Excluding food and energy prices, the core PCE price index climbed by 0.3 percent in October, matching the increase seen in September as well as economist estimates.
The annual rate of growth by the core PCE price index crept up to 2.8 percent in October from 2.7 percent in September, which was also in line with expectations.
While the faster year-over-year price growth was in line with estimates, the acceleration may still have raised concerns about the outlook for interest rates.
“Whilst the CME Fedwatch tool suggests markets still broadly expect a further rate cut from the Federal Reserve next month, there is a concern that the pace of cuts is likely to slow as central bankers respond to the sticky nature of prices in core areas as well as fears about how Trump’s tariffs might impact the U.S. consumer,” said AJ Bell head of financial analysis Danni Hewson.
The inflation readings, which are preferred by the Federal Reserve, largely overshadowed a slew of other U.S. economic data.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index slid by 0.8 percent, while China’s Shanghai Composite Index jumped by 1.5 percent.
The major European markets also ended the day mixed. While the U.K.’s FTSE 100 Index rose by 0.2 percent, the German DAX Index dipped by 0.2 percent and the French CAC 40 Index fell by 0.7 percent.
In the bond market, treasuries moved back to the upside following the pullback seen on Tuesday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.0 basis points to a one-month closing low of 4.242 percent.
Looking Ahead
Following the Thanksgiving Day holiday on Thursday, trading activity on Friday is likely to be subdued amid a lack of major U.S. economic data and an early close for the markets.
SOURCE: RTTNEWS