U.S. Stocks Seeing Continued Volatility In Afternoon Trading

Stocks have seen considerable volatility over the course of the trading session on Wednesday, with the major averages showing wild swings back and forth across the unchanged line after ending the previous session mixed.

The major averages have moved to the upside in recent trading and are currently all in positive territory. The Dow is up 158.29 points or 0.5 percent at 33,843.08, the Nasdaq is up 23.85 points or 0.2 percent at 12,055.73 and the S&P 500 is up 14.77 points or 0.4 percent at 4,123.71.

The volatility on Wall Street comes following the release of the Labor Department’s highly anticipated report on consumer price inflation in the month of March.

While the report showed consumer prices rose by less than expected, many economists said they still expect the Federal Reserve to raise interest rates by another quarter point early next month.

The Labor Department said its consumer price index inched up by 0.1 percent in March after climbing by 0.4 percent in February. Economists had expected consumer prices to rise by 0.3 percent.

The report also showed the annual rate of consumer price growth slowed to 5.0 percent in March from 6.0 percent in February.

The year-over-year growth was slower than the 5.2 percent expected by economists and marks the smallest 12-month increase since May 2021.

Meanwhile, the report also said core consumer prices, which exclude food and energy prices, rose by 0.4 percent in March after advancing by 0.5 percent in February. The increase matched economist estimates.

The annual rate of growth by core consumer prices accelerated to 5.6 percent in March from 5.5 percent in February, which was also in line with expectations.

“Though inflation has moderated, the March consumer price data keeps a 25bps rate hike by the Fed clearly on the table for May,” said Ryan Sweet, Chief U.S. Economist at Oxford Economics. “However, the odds of a pause in June are rising.”

He added, “The Fed has made it clear that the decision to hike at the last meeting was a close one, but services inflation remains strong, and the labor market is tight, therefore their work isn’t done.”

Shortly, the Fed is due to release the minutes of its March monetary policy meeting, which may shed additional on the outlook for interest rates.

Sector News

Oil service stocks have moved significantly higher over the course of the session, driving the Philadelphia Oil Service Index up by 1.3 percent.

The strength among oil service stocks comes amid a sharp increase by the price of crude oil, with crude for May delivery surging $1.93 to $83.46 a barrel.

Notable strength is also visible among software stocks, as reflected by the 1.2 percent gain being posted by the Dow Jones U.S. Software Index.

Brokerage, pharmaceutical and chemical stocks are also seeing some strength in afternoon trading, while airline stocks continue to see considerable weakness after rallying on Tuesday.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan’s Nikkei 225 Index advanced by 0.6 percent, while China’s Shanghai Composite Index rose by 0.4 percent.

The major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index climbed by 0.5 percent, the German DAX Index increased by 0.3 percent and the French CAC 40 Index inched up by 0.1 percent.

In the bond market, treasuries have turned lower over the course of the session after an initial surge. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.3 basis points at 3.447 percent after hitting a low of 3.342 percent.

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