Stocks Close Mixed Following Inflation Data

The New York Stock Exchange (NYSE) closed Tuesday on a mixed note, following the release of the March reading of the U.S. inflation rate, which led to a rise in technology stocks.

Treasury bond yields declined, with the benchmark 10-year U.S. Treasury bond yield falling by 5.6 basis points to near 1.62%

The S&P 500 gained 0.33% to close at a new all-time high, after setting a new intra-day record.

The Nasdaq Composite index finished higher by 1.05%, while the Dow Jones Industrial Average declined by 0.2%.

Tech blue-chip stocks closed in gains, with Apple rising by 2.4%, while Microsoft and Amazon added 1% and 0.6%, respectively.

Meanwhile, the stock of Johnson & Johnson lost 1.34%, after federal health authorities in the U.S. recommended halting the use of the company’s coronavirus vaccine, amid concerns about its side effects and leading to blood clots.

Earlier today, the Consumer Price Index (CPI) in the United States registered last month its biggest increase since August 2012, adding 0.6%, and advanced by 1.6% on a monthly basis.

The substantial rise in inflation came shortly after the Chairman of the U.S. Federal Reserve, Jerome Powell, suggested in a TV interview aired on Sunday that he expects a temporary rise in consumer prices over the summer, reiterating that the monetary policymakers will be patient until they see inflation at 2%. The Fed will be tolerating a short-term spike above that level with the aim to reach an average stable 2% inflation rate.

Meanwhile, President of the Federal Reserve Bank of Philadelphia, Patrick Harker, suggested that the U.S. economy could grow by 5-6% in 2021, supported by a wider rollout of vaccines and reopening the economy.

“While the economic situation is improving, recovery is still in its early stages, and there’s no reason to withdraw support yet.”

“We’re not seeing inflation running out of control. If it does, we’ll act accordingly.”

In other news, the chief economist at the Bank of England (BoE), Andy Haldane, will leave his post after more than 30 years serving in the British central bank, to lead a charity in London.

The market reacted to the news as the British Pound (GBP) slightly fell against the U.S. Dollar (USD), with analysts viewing Haldane as the most hawkish tone within the BoE, with his optimism regarding the recovery of the U.K. economy.