Wall Street mixed, crude surges as inflation data eyed

By Stephen Culp

NEW YORK (Reuters) – The Nasdaq was pulled lower by sagging technology shares and oil prices jumped on Tuesday as investors looked ahead to key inflation data in anticipation of further clues regarding the way forward for the U.S. Federal Reserve’s restrictive monetary policy.

The joined the Nasdaq in negative territory, with Oracle Corp (NYSE:) weighing on sentiment after the cloud services company forecast weaker-than-expected current quarter revenue, hinting at a broader softening of demand.

Energy shares, boosted by a jump in crude prices, jumped 2.3% and helped buoy the blue-chip Dow into positive territory.

“It feels like a late summer day because everyone’s waiting for something to happen and they’re not getting a lot of direction from the markets,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “Money is looking for the next horse to jump on in this race to year-end.”

At the forefront of market participants’ minds is the crucial Consumer Price Index (CPI) report expected on Wednesday, which should shed further light on the meandering, downward path of inflation and provide some clarity regarding the direction of key interest rates.

While core CPI is seen cooling, rising fuel costs are forecast to result in hotter headline inflation, which is unlikely to escape the Fed’s attention.

One week from today, the central bank is due to convene its two-day policy meeting, which is broadly expected to culminate in an interest rate pause.

“People are in a holding pattern waiting to understand policy, and policy goes back to inflation, the labor market, prices and consumer demand,” said Bill Merz, head of capital markets research at U.S. Bank Wealth Management in Minneapolis. “The Fed is also in wait and see mode, they need to see how data evolves before claiming victory.”

“(The Fed has) made good progress so far; it’s that last mile of getting from 3% or 4% to 2%, that’s grabbing the attention of investors,” Merz added.

The rose 51.97 points, or 0.15%, to 34,715.69, the S&P 500 lost 17.28 points, or 0.39%, to 4,470.18 and the dropped 114.72 points, or 0.82%, to 13,803.18.

European shares posted a modest loss, pulled lower by tech weakness in the wake of Oracle revenue forecast and as investors took a cautious stance ahead of the CPI report.

The pan-European index lost 0.18% and MSCI’s gauge of stocks across the globe shed 0.26%.

Emerging market stocks lost 0.13%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.12% lower, while rose 0.95%.

Oil prices rose to a near 10-month high, driven by a tighter supply outlook and a sunny global demand outlook from OPEC, extending the summer-long gains that have resulted in inflationary pressures.

rose 1.78% to settle at $88.84 per barrel, while settled at $92.06, up 1.57% on the day.

The greenback rebounded against a basket of world currencies as the yen backed away from gains due to by comments from Japan’s top banker suggesting a possible end to its negative interest rate policy.

The rose 0.13%, with the euro down 0.16% to $1.0731.

The Japanese yen weakened 0.38% versus the greenback at 147.16 per dollar, while sterling was last trading at $1.2488, down 0.17% on the day.

U.S. Treasury yields were range-bound after a 10-year auction, holding steady ahead of the Labor Department’s CPI report.

Benchmark 10-year notes last rose 4/32 in price to yield 4.2722%, from 4.288% late on Monday.

The 30-year bond last rose 12/32 in price to yield 4.354%, from 4.377% late on Monday.

Gold prices retreated to a more than two-week low, weighed down by the strengthening greenback.

dropped 0.5% to $1,912.54 an ounce.

Source link