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Stock market news live updates: Stocks turn mixed, Wall Street struggles amid inflation fears

·Editor focused on markets and the economy
·7 min read
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Stocks on Friday ended a volatile week on a mixed note, with Wall Street traders giving up on an early rally as markets struggle to balance the strengthening economic recovery against a broad-based surge in prices.  

Asset prices have been shaken by the prospect of inflation derailing the recovery from the pandemic, and potentially nudging the Federal Reserve to reverse its crisis-era policy sooner than expected. On Thursday, the Dow, Nasdaq and S&P managed to snap a 3-day losing streak on news that workers filing for new unemployment benefits fell to a new COVID-19 era low, their lowest in over a year. 

"From our perspective, we do not anticipate that this sharp uptick will translate into a prolonged period of elevated inflation, nor do we believe the Fed is currently running the risk of a policy mistake down the road by not pulling forward its timeline on tapering and rate hikes, as some pundits are suggesting," Brian Belski, chief investment strategist at BMO Capital Markets. 

"Nonetheless, there is no doubt that companies are discussing these pricing pressures, and so too are our clients," he added. 

In the midst of surging prices, the housing market has recently begun to show signs of cooling. On Friday, National Association of Realtors data showed that Existing home sales fell 2.7% to a seasonally adjusted 5.58 million in April from a month earlier. That number was below market expectations, and the latest bit of data that suggests the real estate boom is cooling, but April sales activity was up 33.9% from the comparable year-ago period.

Minutes from the Federal Open Market Committee's (FOMC) April meeting this week fanned investor jitters about the interest rate outlook. The idea of slowly removing accommodation "is something that, in my mind, we should start to have a conversation about sooner rather than later,” Philadelphia Fed President Patrick Harker — a non-FOMC voter — said on Friday

The minutes showed that "a number of participants suggested" that if the economy continues to improve rapidly, "it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases," which have currently been taking place at the aggressive rate of $120 billion per month over the past year.

That was enough to rattle the market, with traders confronting the possibility that the recovery might stir up lasting inflation — and prompt a roll-back of the Fed's accomodative monetary policy. 

"The FOMC minutes let the taper talk cat out of the bag and now we get to hear where policymakers stand on removing some accommodation," according to Edward Moya, a senior market analyst at OANDA.

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Meanwhile, cryptocurrency prices began sliding anew, as the Chinese government warned that it may crack down on digital coin mining, and fallout lingered from remarks by Tesla CEO Elon Musk that sparked an ugly rout. Bitcoin (BTC-USD) briefly swooned to levels close to $32,000 before recovering some of that lost ground, but digital currencies came under renewed pressure on Friday.

And at least a few Wall Street watchers are starting to question the viability of the crypto surge. 

“What’s true for glamour and style might also be true for Bitcoin,” wrote Deutsche Bank’s Marion Labouré in a note to clients on Thursday. “Just as a ‘fashion faux pas’ can happen suddenly, we just received the proof that digital currencies can also quickly become passé.”

4:00 p.m. ET: Stocks end on a mixed note as rally loses steam

Here's where the trading day ended:

  • S&P 500 (^GSPC): 4,156.05, -3.07 (-0.07%)

  • Dow (^DJI): 34,209.03, +124.88 (+0.37%)

  • Nasdaq (^IXIC): 13,470.99, -64.75 (-0.48%)

  • Crude (CL=F): $63.81 a barrel, +$1.87 (+3.02%)

  • Gold (GC=F): $1,879.90 per ounce, -$2.00 (-0.11%)

  • 10-year Treasury (^TNX): yield 1.6320%, -0.0020 basis points

12:30 p.m. ET: Philly Fed: We need to talk about monetary policy

Philadelphia Fed Bank President Patrick Harker said the quiet part out loud on Friday, telling an audience that the Fed should start talking about the best way to reduce their asset purchases "sooner rather than later." Note that Harker isn't a voter until 2023, but stocks, which had steadily been losing altitude, are now near the day's lows.

12 p.m. ET: Tech runs out of steam but broader market keeps gains

Here were the main moves as of noon Eastern:

  • S&P 500 (^GSPC): 4,166.14, +7.02 (+0.17%)

  • Dow (^DJI): 34,300.71, +216.56 (+0.64%)

  • Nasdaq (^IXIC): 13,495.99, -39.75 (-0.29%)

10:30 a.m. ET: 'Tim Cook, please take the stand...'

Apple CEO Tim Cook speaks during Apple's annual Worldwide Developers Conference in San Jose, California, U.S. June 3, 2019. REUTERS/Mason Trinca
Apple CEO Tim Cook speaks during Apple's annual Worldwide Developers Conference in San Jose, California, U.S. June 3, 2019. REUTERS/Mason Trinca

Apple (AAPL) CEO Tim Cook will take the witness stand Friday morning in the company's closely watched court battle with "Fortnite" developer Epic. 

Cook's testimony will prove to be an important piece of Apple's defense, as it seeks to fend off allegations that it operates its App Store as an illegal monopoly, Yahoo Finance's Dan Howley explains.  

10 a.m. ET: Housing market showing signs of fatigue

Existing home sales fell 2.7% to a seasonally adjusted 5.58 million in April, from a month earlier, according to the National Association of Realtors (NAR). While that number was below market expectations, and the latest bit of data that suggests the real estate boom is cooling, April sales activity was up 33.9% from the same month a year earlier when the nation was under a lockdown due to the coronavirus pandemic. 

9:40 a.m. ET: Consumer prices 'quickly coming back to life'

In a sobering research note, JPMorgan Chase noted that consumer prices are "quickly coming back to life" after last year's marginal gain. In fact, prices have surged 4.6% in the first 4 months of 2021 alone, in part attributed to oil and commodities.

With that being said, the bank noted that core CPI advanced at a 2.6% gain from January to April — underscoring why investors are so spooked:

Global core goods price gains have been persistently high, with inflation holding at its fastest pace in two decades since last summer. This upward pressure has been accompanied by a more recent sharp acceleration in global services price inflation.

We see two forces behind the jump in core inflation: 1) supply constraints slowing production relative to boomy demand and 2) a normalization of last year’s services activity and price collapse. Past experience suggests that these forces have only limited effects, with core inflation recovering only gradually over the expansion and prices remaining depressed through the subsequent expansion. Industrial supply has traditionally been elastic and bottleneck pressures in the form of “speed limit” effects are hard to identify. Statistical evidence also points against mean-reversion in the level of prices.

9:30 a.m. ET: Stocks pop at the open bell

Here were the main moves at the start of the trading day:

  • S&P 500 (^GSPC): 4,177.58, +18.46 (+0.44%)

  • Dow (^DJI): 34,253.93, +169.78 (+0.50%)

  • Nasdaq (^IXIC): 13,599.44, +63.71 (+0.47%)

  • Crude (CL=F): $63.37 per barrel, +$1.43 (+2.31%)

  • Gold (GC=F): $1,888.00 per ounce, +$6.10 (+0.32%)

  • 10-year Treasury (^TNX): -0.02 bps to yield 1.613%

7:30 a.m. ET: Friday: Stock futures gain, point to 2nd day of gains

Here were the main moves in markets Friday morning:

  • S&P 500 futures (ES=F): 4,167.75, +13.50 (+0.32%)

  • Dow futures (YM=F): 34,147.00, +119.00 (+0.35%)

  • Nasdaq futures (NQ=F): 13,529.75, +43.25(+0.32%)

6:15 p.m. ET Thursday: Stock futures open flat

Here were the main moves in markets Thursday evening: 

  • S&P 500 futures (ES=F): down 1 point at 4,153.25

  • Dow futures (YM=F): up 5 at 34,025 

  • Nasdaq futures (NQ=F): up 5.5 points at 13,489