Stocks Swing, Yields Soar On Highest Inflation In 40 Years

With inflation going only higher, stocks are swinging on Wall Street Thursday as expectations build that the Federal Reserve will have to get more aggressive about removing the tremendous support it’s given the economy, Stan Choe reported for the Associated Press (AP).

Photo Insert: Wall Street pared its losses as oil producers and other companies that could benefit from higher inflation and interest rates gained.

The hottest inflation reading since 1982 sent the S&P 500 down 0.2% in morning trading. It also sent Treasury yields jumping, as traders built up bets the Fed may have to apply the brakes to the economy with a bigger-than-usual hike in interest rates next month. The yield on the 10-year Treasury briefly topped 2% for the first time since August 2019.

Stock prices swung after the report, which was even hotter than economists expected. At the start of trading, sharp slumps for tech stocks sent the S&P 500 down as much as 1.2%, following the usual playbook when expectations build for rising rates.

But Wall Street pared its losses as oil producers and other companies that could benefit from higher inflation and interest rates gained.

The Dow Jones Industrial Average was down just 46 points, or 0.1%, at 35,722 after earlier losing as many as 288 points. The Nasdaq composite was 0.2% lower, as of 10:37 a.m. Eastern time, after coming back from a 1.9% loss.

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