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'The demographic dividend of the last 40 years is ending': J.P. Morgan says the world is running out of the two things that kept interest rates down

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FinanceMarkets

Stocks wobble after yet another hot read on inflation at the wholesale level

By
Damian J. Troise
Damian J. Troise
and
The Associated Press
The Associated Press
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By
Damian J. Troise
Damian J. Troise
and
The Associated Press
The Associated Press
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October 12, 2022, 11:16 AM ET
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NEW YORK (AP) — Stocks wavered between small gains and losses in morning trading on Wall Street Wednesday after a report showed that inflation remains very hot.

The S&P 500 rose 0.1% as of 10:16 a.m. Eastern. The Dow Jones Industrial Average rose 128 points, or 0.4%, to 29,367 and the Nasdaq fell 0.1%.

Health care companies gained ground. Moderna surged 9.5% after announcing a deal with Merck to develop a cancer vaccine.

U.S. crude oil prices fell 1.1% and weighed down energy stocks. Hess slipped 1.3%.

Small company stocks fell in a potential sign that Wall Street is worried about economic growth. The Russell 2000 slipped 0.9%.

Treasury yields, which have driven much of Wall Street’s recent trading, were holding relatively steady. The yield on the 10-year Treasury, which affects mortgage rates, fell to 3.94% from 3.95% late Tuesday. The yield on the 2-year Treasury remained at 4.31% from late Tuesday.

Markets have been volatile all week as investors wait for the latest round of big company earnings reports and fresh reports on inflation and retail sales. The benchmark S&P 500 is coming off five straight losses and is close to its lowest point in nearly two years.

A report from the government showed that inflation at the wholesale level eased last month, though it was a bit worse than economists expected. A more closely watched component of the inflation data matched economists’ forecasts.

Inflation updates are being closely watched by investors who worry that stubbornly high prices on everything from food to clothing could lead to a recession. Those worries have been worsened by central banks around the world raising interest rates to make borrowing more expensive and slow economic growth.

The Federal Reserve has been particularly aggressive, and its strategy carries the risk of stalling an already slowing economy and causing a recession. The central bank will release minutes from its last meeting later on Wednesday, possibly giving Wall Street more insight into its views on inflation and next steps on interest rates.

A closely watched report on consumer prices is due Thursday and data on retail sales for September is due Friday. Both reports could help give Wall Street a clearer picture of where prices remain hottest and how consumers are reacting.

The corporate earnings season begins in earnest this week. PepsiCo rose 3.4% after raising its profit forecast for the year following encouraging quarterly financial results.

Domino’s Pizza and Walgreens will report their results on Thursday. Big banks, including Citigroup and JPMorgan Chase, will report results on Friday.

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