The Nasdaq closed down on Tuesday after a dismal forecast from Micron Technology pulled chip makers and tech stocks lower. Investors await U.S. inflation data that could lead the Federal Reserve to further tighten its efforts to curb inflation. High inflation numbers on Wednesday, following last week's blowout jobs report, would likely stop the Fed from easing interest rates hikes.

Unit labor costs rose at a 10.8% rate, following a 12.7% rate of growth in the first quarter. "We're still seeing wage pressure building, using last Friday's job data as a gauge," said Jimmy Chang, chief investment officer at Rockefeller Global Family Office.

Inflation at the moment is primarily supply driven, so the traditional central bank playbook of tightening rates to crimp demand will not be as effective as previous cycles. "I don't think it's going to be a set of numbers that will change the Fed’s policy course," says Jean Boivin.

Seven of the 11 major S&P 500 sectors fell, led by a 1.5%decline in consumer discretionary. Volume on U.S. exchanges was 10.64 billion shares, compared with the 10.94 billion average for the full session over the past 20 trading days.

Micron Technology Inc (MU.O) slid 3.7% after the memory-chipmaker cut its current-quarter revenue forecast. Value stocks (.IVX) closed flat, while the growth index (.IGX) slid 0.8%. The jobs data from last Friday eroded some of the bullish arguments that the Fed would "pivot" to a neutral policy stance.
Posted by WA wagmi
Tap to Copy the Short Url to This Post: 
One-Stop Business News backed by Mark Cuban. Free to Use →