THE GIST (“THE WHAT”)
A better-than-feared CPI read sparked hopes that the Fed might be nearing its monetary tightening cycle, sending mega-cap Tech stocks higher and pushing the broader index to close today’s session with modest gains. Early session gains, however lost steam as investors digested the inflation read. But finding a strong support at the 4100 level, the S&P 500 index rallied sharply throughout the later part of the trading session to close near day’s highs at 4137.63, up 18.65 points (0.45%).
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THE DETAILS (The “How & Why”):
The highly anticipated April’s CPI read came in better-than-feared, up 4.9% as against the 5% expected annual increase. Yields moved lower, boosting mega-cap tech and chip stocks. Amazon.com, Apple Inc, and Alphabet Inc were sharply higher by 3.35%, 1.04% and 4.10%, respectively.
Regional banks extended their slide. KeyCorp, Lincoln National and Comerica settled lower by more than 3% each. Energy stocks and other cyclical stocks were also sold off on recessionary concerns. Looming debt ceiling in the face of rising interest rates continues to cap optimism.
On the earnings front, Twilio Inc. and Airbnb Inc were some of the worst decliners following disappointing earnings, tumbling 12.64% and 10.92%, respectively.