Stocks fell after a choppy session on Wednesday, as investors digested the latest U.S. inflation data. The Dow Jones Industrial Average dropped over 300 points, while the S&P 500 Index and the Nasdaq Composite dropped 1.6% and 3%, respectively.
The moves came following a hotter-than-expected Consumer Price Index (CPI) report for April. While the rate of price increases came in above expectations, a silver lining in the report showed some inflation deceleration in April compared to March.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
CPI comes in higher-than-expected in April:
U.S. consumer prices rose at a slightly slower pace in April over March, but ongoing supply-side disruptions continue to hold inflation near its highest level in 40 years.
April's Consumer Price Index (CPI) rose 8.3% in April year-over-year, according to the Bureau of Labor Statistics' report published Wednesday, slightly decelerating from March's 8.5% print. Wall Street consensus was expected a rise of 8.1% in April, according to Bloomberg. April's CPI increase by 0.3% month-over-month, decelerating from March's 1.2% rise.
Excluding more volatile food and energy prices, Core CPI rose by 6.2% in April over last year, following March's 6.5% rise. Month-to-month, April's Core CPI increased by 0.3%.
Mortgage applications rose for second consecutive week:
U.S. mortgage application volume rose for a second straight week in early May, despite mortgage rates climbing to their highest levels in over a decade.
The Mortgage Bankers Association's (MBA) weekly mortgage application index rose 2.0% during the week ended May 6, according to the firm's weekly report published Wednesday. Beneath the headline, purchase applications increased 5% week-over-week on a seasonally adjusted basis. On a seasonally unadjusted basis, purchase applications decreased 8% compared to the same week last year. Refinance applications fell 2% compared to the prior week and by 72% year-over-year.
"The increase in mortgage applications last week was driven by a strong gain in application activity for conventional and government purchase loans, even as mortgage rates rose to their highest level--5.53%--since 2009," said Joel Kan, associate vice president of economic and industry forecasting at MBA, said in a press statement. "Despite a slow start to their year's spring home buying season, prospective buyers are showing some resilience to higher rates."
Here's how benchmarks started trading soon after market open:
S&P 500 Index: -0.27% or -10.85 points to 3,990.20
Dow Jones Industrial Average: -0.01% or -3.09 points to 32,157.65
Nasdaq Composite Index: -0.32% or -37.78 points to 11,699.89
