Dow falls 500 points, Treasury yields jump after strong inflation data: Live updates

U.S. stocks started Wednesday’s trading session in the red.

The Dow tumbled 400 points, or 1%. The S&P 500 and Nasdaq Composite lost 1.2% and 1.3%, respectively.

— Hakyung Kim

Shares of several industrial and cyclical names fell amid concerns that higher rates for longer will slow down the economy.

Deere, Caterpillar and Eaton were all down about 2% in premarket trading.

Meanwhile, the Industrial Select Sector SPDR Fund, which tracks the sector, slipped 1.3%.

— Michelle Fox

Check out some of the companies making headlines in premarket trading.

• Nvidia — Stock in the chipmaker slipped less than 1% before the opening bell, but the artificial intelligence play and “Magnificent Seven” leader officially entered correction territory on Tuesday. Shares have fallen 10% from an all-time closing high of $950 per share on March 25.

• Alibaba Group — The China-based e-commerce stock rose nearly 3% on media reports that co-founder Jack Ma touted the company’s management in an internal memo to employees. Ma’s upbeat note also talked about the potential for AI.

• Albemarle — Shares gained about 2% after Bank of America upgraded the chemicals manufacturing company to buy on the back of rising lithium prices, and raised its price target.

Read the full list here.

— Brian Evans

A key U.S. inflation metric came in hotter than expected, raising concern that the Federal Reserve may not cut interest rates this year.

The consumer price index rose 0.4% in March from the prior month. Year over year, it gained 3.5%. Economists polled by Dow Jones expected a 0.3% gain month over month and a 3.4% increase year on year.

The March CPI increase was a reacceleration from February, when it gained 3.2%.

Core CPI, which strips out volatile food and energy prices, also rose more than expected last month.

— Fred Imbert

The Federal Reserve may not be able to cut interest rates as it intended to amid stubborn inflation and hot growth in the U.S., Bob Prince, Bridgewater’s co-chief investment officer, told the Financial Times Tuesday.

“So far, this year is not transpiring the way that the Fed — or interest rate markets — have described. I think it is clear the Fed is off-track now. The question is how far off track,” he said in the interview with the paper.

Because Prince expects rates to stay elevated for the time being, he said he saw “no reason to move out of cash into longer-term bonds at the moment.”

— Click here to read the FT story.

— Yun Li

LME Aluminum hit 2,488 per metric ton Wednesday morning, the highest level since Feb. 10, 2023, when it traded as high as $2,504.

Prices have climbed on continued supply concerns as aluminum usage is expected to grow with use in solar power and wind turbines. U.S. production has fallen from 3.8M metric tons in 1999, to 785,000 tons in 2023.

LME Tin also reached a high of $33,130 per metric ton, the highest level since Jun. 16, 2022, when it traded as high as $33,400.

— Hakyung Kim

Delta shares were up more than 2% on the back of first-quarter earnings that beat analyst expectations.

The airline earned an adjusted 45 cents per share, topping an LSEG forecast of 36 cents per share. Revenue came in line at $12.56 billion. The company also reiterated its full-year earnings guidance.

European stocks opened higher Wednesday, with the Stoxx 600 index up 0.6% at 8:20 a.m. London time and all sectors in the green.

Germany’s DAX and the U.K.’s FTSE 100 were both around 0.6% higher, while France’s CAC 40 climbed 0.5%.

Ratings agency Fitch revised its outlook on China to “negative” from “stable,” citing “increasing risks to China’s public finance outlook.”

The agency said in its report that the country faces more uncertain economic prospects and a transition away from property reliant growth.

Furthermore, it noted that wide fiscal deficits and rising government debt in recent years have eroded fiscal buffers, and that debt could still increase as fiscal policy increasingly plays an important role in supporting growth in the coming years.

However, Fitch affirmed its A+ rating on China, citing supporting factors including its large and diversified economy, solid GDP growth prospects relative to peers and an integral role in global goods trade.

— Lim Hui Jie

Chinese internet technology giant NetEase has teamed up with Microsoft to bring back games by Blizzard Entertainment to the world’s second-largest economy.

The move comes after the partnership between the two companies was terminated in 2023 by Blizzard, citing disagreement over intellectual property control.

The press release states that the renewed publishing agreement will encompass games Chinese players had access to under the previous agreement, including World of Warcraft and Overwatch.

Separately, Microsoft and NetEase have also entered into an agreement to explore bringing new NetEase titles to Xbox consoles and other platforms.

Japan’s corporate goods price index rose 0.8% in March from a year ago, accelerating from the revised 0.7% increase in February and in line with expectations from economists polled by Reuters.

This is also the third straight month that the corporate inflation rate has increased.

On a month on month basis, the CGPI climbed 0.2%, slightly lower than Reuters expectations of a 0.3% increase.

The CGPI measures the price changes of goods traded within the corporate sector.

— Lim Hui Jie

Check out some of the names making headlines in after-hours trading Tuesday:

• PriceSmart shares gained 3.2% after beating second-quarter estimates. The company, which operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, reported $1.31 in adjusted earnings per share on revenue of $1.29 billion. Analysts surveyed by FactSet had expected $1.24 in earnings, excluding items, on revenue of $1.29B for the quarterly period.
• SMART Global Holdings shares slid 7% after disappointing on second-quarter revenue expectations, posting $284.8 million in earnings while analysts polled by FactSet had called for $285.1 million. The memory and storage solutions provider reported earnings of 27 cents per share, excluding items, while analysts polled by FactSet had called for 25 cents per share in earnings.
• WD-40 shares edged lower by 0.5% after falling short of analysts’ revenue forecast for the second quarter. The company beat on earnings, but posted $139.1 million in quarterly revenue, while analysts surveyed by FactSet had called for $140.5 million.

— Pia Singh