Stocks fell Wednesday, with tech taking a real beating, after recent consumer price data revealed that prices had risen to their highest level in three decades.
The Dow Jones Industrial Average finished down 240 points, or 0.66%, to 36,079 and the S&P 500 slipped 0.82%.
The tech-heavy Nasdaq fell 1.66%, with some of the biggest names in the sector — Amazon (AMZN), Meta Platforms (FB), formerly Facebook, and Alphabet (GOOGL) — all ending in the red.
On Tuesday, stocks snapped their record winning streak of eight consecutive all-time highs.
The Consumer Price Index marked a 0.9% increase in October, reflecting a 6.2% year-over-year increase, the fastest since 1990 and exceeding analyst estimates of 5.9%.
Changes in the CPI are used to assess shifts in the cost of living.
Ryan Detrick, chief market strategist for LPL Financial, said “inflation remains stubbornly high, to the surprise of many that expected prices to come back to earth sooner.”
“The truth is you cant shut down a $20 trillion economy and not feel some bumps as it restarts,” he said, “but we are hopeful the supply chain issues will resolve over the coming quarters and inflation should calm down as well.”
The 10-year Treasury yield rose 0.116% following the release of the CPI.
Cliff Hodge, chief investment officer for Cornerstone Wealth, noted that below the surface, over 80% of CPI subcomponents were above 2%, the highest since 1991, “which indicates broader price increases, not only related to reopening.”
“The bond market is telling you that the Fed is way behind the curve on policy, as short rates rocketed while long rates have taken the release in stride,” Hodge said. “A flattening curve does not portend well for risk assets into next year. ”
In company news, Tesla (TSLA) started the day off in the red, but shares finished up 4.3% after Bank of America analyst John Murphy lifted his price target on the electric vehicle maker by $200, to $1,200 a share.
Rivian Automotive (RIVN), the electric vehicle maker backed by Amazon.com (AMZN) and automotive mega-company Ford (F), skyrocketed on its first day of trading, with shares finishing up 29% to $100.73.
Rivian priced its initial public offering at $78 a share, valuing the EV maker at a $66.5 billion.
Poshmark (POSH) shares plummeted after the online apparel resale platform posted a wider-than-expected third-quarter loss and warned the recent privacy changes from Apple (AAPL) would trigger higher marketing spend.
Coinbase Global (COIN) tumbled after the biggest U.S. cryptocurrency exchange reported profit that trailed expectations in the third quarter.
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