WMB - US Stocks Priming For Relief Rally After Inflation-Driven Selloff: Strategist Expects To Be Among 'Buyers Of Pullback' Over Next 2-5 Days | Benzinga
With January’s inflation data in the rearview mirror, U.S. stocks could strive to find their footing on Wednesday after hotter-than-expected January inflation data spooked traders in the previous session. The earnings news flow continues to be mixed, although there have been notable upward moves in certain stocks in reaction to quarterly numbers. The lone piece of Main Street catalyst due for the day is a speech by a supposedly “centrist” Fed official.
Cues From Tuesday’s Trading:
All of January’s headline inflation readings came in more than expected, sending bond yields soaring and stocks lower on Tuesday. The averages opened uniformly lower and moved roughly sideways before dropping to intraday lows by late afternoon trading. Although the indices trimmed some of their losses in late trading, they closed well below the flat line.
The “CPI report caught a lot of people off guard – many investors were expecting the Fed to begin cutting rates and were spending a lot of time arguing that the Fed was taking too long to get started – not appreciating that inflation could be sticky and not continue down in a straight line, said Independent Advisor Alliance Chief Investment Officer Chris Zaccarelli.
The Nasdaq Composite and the S&P 500 Index ended at their lowest level in about a week, with the latter dropping below the 5,000 mark, and the 30-stock Dow Industrials fell to its lowest level in February The worst-hit were the small-cap stocks as they plummeted in the session.
Tuesday’s sell-off was broad-based, with the consumer discretionary sector leading the slide.
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