NEW YORK, June 10 ― US stocks sold off sharply yesterday as investor anxiety heightened ahead of data today that is expected to show consumer prices remained elevated in May.
Selling picked up toward the end of the session. Mega-cap growth stocks led the drop, with Apple Inc and Amazon.com Inc falling 3.6 per cent and 4.2 per cent, respectively, and putting the most pressure on the S&P 500 and the Nasdaq.
Communication services and technology had the biggest declines among sectors, although all 11 S&P 500 sectors ended lower on the day.
Adding to nervousness, the benchmark US 10-year Treasury yield climbed to as much as 3.073 per cent, its highest level since May 11.
Recent sharp gains in oil prices also weighed on sentiment before today's US consumer price index report.
“We're getting prepared for what the news might be regarding inflation tomorrow,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
“I view it as mixed. If the total is high and the core number shows some sort of drop, I actually think the markets could rally on that because it'll show that things are kind of rolling over a bit.” The data is expected to show that consumer prices rose 0.7 per cent in May, while the core consumer price index (CPI), which excludes the volatile food and energy sectors, rose 0.5 per cent in the month.
The Dow Jones Industrial Average fell 638.11 points, or 1.94 per cent, to 32,272.79; the S&P 500 lost 97.95 points, or 2.38 per cent, to 4,017.82; and the Nasdaq Composite dropped 332.05 points, or 2.75 per cent, to 11,754.23.
All three of the major indexes registered their biggest daily percentage declines since mid-May. The S&P 500 is down 15.7 per cent for the year so far and the Nasdaq is down about 25 per cent.
Higher-than-expected inflation readings could increase fears that the US Federal Reserve will raise interest rates more aggressively than previously expected.
The central bank has raised its short-term interest rate by three-quarters of a percentage point this year and intends to keep at it with 50 basis points increases at its meeting next week and again in July.
Alibaba Group shares slid 8.1 per cent after its affiliate Ant Group said it has no plan to initiate an initial public offering.
Declining issues outnumbered advancing ones on the NYSE by a 5.51-to-1 ratio; on Nasdaq, a 2.79-to-1 ratio favoured decliners.
The S&P 500 posted one new 52-week high and 31 new lows; the Nasdaq Composite recorded 18 new highs and 127 new lows.
Volume on US exchanges was 11.50 billion shares, compared with the 12.07 billion-share average for the full session over the last 20 trading days. ― Reuters