Big Tech Losses Pull US Stock Market Down as Inflation Gauge Ticks Higher

Wall Street experienced a rocky Wednesday morning as losses in Big Tech stocks countered broader market gains as a key inflation gauge ticked higher.

What Are the Big Tech Losses?

Ahead of the inflation report, despite a largely positive performance across most sectors, heavyweight technology companies like Nvidia and Microsoft dragged the S&P 500 down by 0.1 percent. Meanwhile, the Dow Jones Industrial Average inched up 61 points, or 0.1 percent, continuing its upward momentum from record highs reached the previous day. The Nasdaq fell by 0.4 percent.

The market turbulence was exacerbated by disappointing earnings reports from major personal computer manufacturers. HP’s stock plummeted by 9.7 percent after delivering an earnings forecast that fell short of expectations for the current quarter. Dell faced an even steeper decline of 12.3 percent following revenue results that missed Wall Street projections.

Inflation Report

Inflation’s downward trend over the past two years hit a snag in October as consumer price increases picked up pace, according to the Federal Reserve’s preferred inflation metric.

The Commerce Department reported Wednesday that consumer prices rose 2.3 percent last month compared to a year earlier, up from 2.1 percent in September. While the increase remains just slightly above the Fed’s 2 percent target, it signals a potential pause in inflation’s steady decline.

Core inflation also ticked higher as core prices rose 2.8 percent in October compared to a year earlier, up from 2.7 percent the previous month. Economists view core inflation as a critical indicator of longer-term price trends, making this uptick particularly noteworthy.

Although inflation has significantly receded from its peak of 7 percent in mid-2022, core inflation has stubbornly hovered at 2.8 percent since February. Price pressures remain concentrated in service sectors, with apartment rents, dining out and insurance for cars and homes driving costs higher.

The report also highlighted a resilient U.S. economy underpinned by healthy income and spending levels. Americans’ incomes rose 0.6 percent from September to October, surpassing expectations, while consumer spending increased by a robust 0.4 percent. These factors have helped sustain economic growth despite persistent fears of a slowdown.

Broader Economic Market

In the broader economic landscape, the U.S. economy maintained a robust 2.8 percent annual growth rate for the third quarter, a figure confirmed by the Commerce Department on Wednesday. This growth was attributed to strong consumer spending and a notable increase in exports. However, consumer confidence, as reported by the Conference Board on Tuesday, rose in November but lagged behind economists’ predictions.

The bond market reflected cautious optimism, with Treasury yields slightly declining. The 10-year Treasury yield fell to 4.25 percent from 4.30 percent, while the two-year Treasury yield slipped to 4.21 percent from 4.25 percent.

This article includes reporting from The Associated Press.