Market Snapshot: Dow, S&P 500 book worst day in 3 weeks, Nasdaq tumbles 2.8% ahead of key inflation number

Supply disruptions tied to the pandemic and the war in Ukraine, along with a revival in consumer demand for services rather than goods, have pushed prices up at the fastest pace in about 40 years.

The consumer-price index is expected to show a large 0.7% increase when the report is released Friday morning — more than double the gain in the prior month. In April, the yearly rate fell for the first time in eight months to 8.3%. The prior 8.5% reading in March was the biggest since December of 1981.

See: U.S. didn’t get any relief from high inflation in May – CPI to show another big gain

“Here’s what I expect: I think goods inflation comes down a bit, but services come up a bit,” said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research, by phone.

Target Corp’s
TGT,
-1.37%
markdown strategy announced this week, due to its inventory glut, was a prime example of the shift, he said. “People are trending away from buying stuff to experiences.”

In U.S. economic data Thursday, total household net worth fell $5.4 billion to $149.2 trillion in the first quarter, according to Fed data. It was the first drop after seven straight quarters of expansion, coming as the value of stockholdings tumbled in 2022, but as home values continued to add gains.

Also, the number of Americans filing for unemployment insurance showed more newly jobless workers asking for benefits than at any time during the past five months. New filings for unemployment benefits jumped by 27,000 last week to a five-month high of 229,000, but almost the entire increase appeared to stem from seasonal quirks tied to the Memorial Day holiday.

Earlier Thursday, U.S. stocks followed European equities lower, after the European Central Bank affirmed that next month it would halt asset purchases and raise interest rates for the first time in more than a decade.

“Inflation and the Fed’s quantitative tightening plan to throttle it, are the consensus leading concerns in the market right now,” Louis Navellier, founder of Navellier & Associates, wrote in a daily client note.

He also noted that stocks have remained in a holding pattern lately, but echoed JPMorgan Chase & Co
JPM,
-2.10%
CEO Jamie Dimon’s warning of: “Brace yourself,” for volatility after Friday’s data release.

Companies in focus

U.S.-listed shares of Credit Suisse Group AG
CS,
-5.09%
closed 5.1% lower after State Street Corp. 
STT,
-1.30%
said it was not pursuing an acquisition of, or any business combination with, the Switzerland-based bank.

Meta Platforms Inc.
META,
-6.43%,
 the Mark Zuckerberg company behind Facebook, changed its ticker symbol from FB to META. Shares lost 6.4% Thursday, adding to its roughly 45% plunge on the year.

Walt Disney Company
DIS,
-3.76%
shares shed 3.8% after the company said it was tapping Dana Walden as chairman of Disney General Entertainment Content, where she will succeed Peter Rice, one of the company’s top television executives.

Tesla TSLA, the electric vehicle leader, fell 0.9% after UBS upgraded the stock to buy from neutral while leaving the price target of $1,100 unchanged.

NXP Semiconductors
NXPI,
+4.04%
was one of the market’s best performers, rising 4%, on reports of a potential takeover by Samsung.

Shares of several COVID vaccine makers slumped Thursday, including Moderna,
MRNA,
-9.76%
and Novavax
NVAX,
-17.22%.
The latter shed 17.2% on worries that the FDA might delay approval of its booster shot.

Other market action

The U.S. dollar
DXY,
+0.74%
gained against a basket of rival currencies, up 0.8%.

Treasury yields rose, with the 10-year
TMUBMUSD10Y,
3.046%
up 1.3 basis points to 3.041%, holding above the critical 3% threshold.

Crude oil prices
CL.1,
-0.57%
eased on Thursday following Wednesday sharp move higher, as front-month futures for WTI crude, the U.S. benchmark, fell 0.5% to settle at $121.51 per barrel.

––Steve Goldstein contributed reporting to this article