US stocks slide ahead of CPI data

The tech-heavy Nasdaq and S&P 500 fell on Wednesday due to dovish comments by US Federal Reserve officials. Megacap growth and technology stocks, like Nvidia, Apple, and Tesla, shed between 0.6% and 2.5% in early trading.

However, there has been some improvement in the Nasdaq, which coincides with profit taking at the end of July. The Consumer Price Index for July is expected to show a slight year-over-year acceleration, with consumer prices expected to increase 0.2% on a month-to-month basis.

Fed’s Patrick Harker suggested that the US central bank may be at the stage where it can leave interest rates unchanged, barring any abrupt change in the direction of recent economic data. However, some central bank officials are still leaning the other way, with Fed Governor Michelle Bowman stating that the combination of still-elevated inflation and continued economic growth means further rate increases are likely.

Traders expect an 86.5% chance of no rate hike at the Fed’s next policy meeting in September. Wall Street’s main indexes ended the previous session lower in a broad selloff after the downgrading of several small and mid-sized banks by credit rating agency Moody’s.

Six of the top 11 S&P 500 sectors advanced, led by gains in energy stocks, Penn Entertainment’s shares jumped 15.9% on a $2 billion deal with Walt Disney’s ESPN to launch a sports betting business, and Lyft signaling it would double down on competitive pricing to catch up with rival Uber. Of the 443 S&P 500 companies that reported results as of Tuesday, 78.6% beat analyst expectations.