Stocks extended losses on Wednesday, retreating from this week's record highs with investors fixing their attention on a key inflation report that showed a greater-than-expected jump in consumer prices last month.
The S&P 500 Index is coming off its first session of losses following eight straight days of gains, with the Dow and Nasdaq each also pulling back from record-setting runs.
One of the most closely watched reports Wednesday morning was the Labor Department's Consumer Price Index (CPI) for October, which counterbalanced strong jobless claims that sank to their lowest of the COVID-19 era.
Consumer prices soared 6.2% in October compared to last year, accelerating from September's 5.4% year-over-year rate. This was a bigger jump than the 5.9% rise anticipated, based on Bloomberg consensus data. And it represented the fastest annual rise in consumer inflation since 1990.
The staying power and magnitude of inflationary pressures has become a critical question for market participants, with companies across industries reporting rising input costs and price hikes in order to pass on these expenses and preserve margins. While third-quarter earnings results have showed that S&P 500 companies have largely been able to navigate these cost pressures, the possibility remains that lasting inflation could exert a greater impact, especially if consumers ultimately prove unwilling to pay higher prices.
"That's going to be one of the big things going forward, to see whether or not that consumer sentiment can bounce back, whether consumers will be resilient in the face of these price pressures, or whether they'll start to pull back a bit and decide they're going to hold off on spending and wait to see when prices come down or at least stabilize before they spend more in the new year," Yung-Yu Ma, BMO Wealth Management's chief investment strategist, told Yahoo Finance.
"So that remains to be seen, and that is a big question mark as we go into 2022," Ma added.
Inflation data so far has reflected still-elevated pressures in the recovering economy, even as Federal Reserve officials maintained that the supply-related factors creating these heightened costs would eventually wane. Tuesday's Producer Price Index from the Bureau of Labor Statistics showed that prices paid to producers jumped by a marked 8.6% in October compared to last year, representing the fastest rise in data extending back to 2010. And last week's October jobs report showed average hourly earnings jumped 4.9% last month compared to the same period last year, accelerating from September's 4.6% annual rise.
Meanwhile, a bevy of companies will report quarterly earnings results, including Disney (DIS), Bumble (BMBL), Wish (WISH) and Beyond Meat (BYND) after market close.
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4:03 p.m. ET: Tech shares lead stock drop after hotter-than-expected inflation print; Nasdaq posts worst day since early Oct.
Here were the main moves in markets as of 4:03 p.m. ET:
S&P 500 (^GSPC): -38.55 (-0.82%) to 4,646.70
Dow (^DJI): -240.04 (-0.66%) to 36,079.94
Nasdaq (^IXIC): -263.84 (-1.66%) to 15,622.71
Crude (CL=F): -$2.87 (-3.41%) to $81.28 a barrel
Gold (GC=F): +$22.30 (+1.22%) to $1,853.10 per ounce
10-year Treasury (^TNX): +12.8 bps to yield 1.5600%
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12:17 p.m. ET: Amazon-backed Rivian shares to begin trading after $11.9 billion IPO
Electric-vehicle maker Rivian, backed by companies including Amazon and Ford, is set to see shares begin trading publicly on Wednesday after an upsized initial public offering. The company priced its IPO at $78 per share late Tuesday to raise $11.9 billion, in the sixth largest IPO ever on a U.S. exchange, according to Bloomberg data.
Investors are already bidding up the stock price further. As of Wednesday afternoon, the stock was indicated to open at $111 apiece, marking a jump from its IPO pricing. The price discovery process was still under way as of 12:17 p.m. ET.
Rivian has yet to begin delivering its vehicles at scale, and it is expected to produce just 1,200 units by. the end of this year at its flagship plant in Illinois. It expects annual production to hit 150,000 vehicles at this facility by the end of 2023. Amazon has a contract with Rivian to be provided with 100,000 of its vehicles by 2024.
The company remains unprofitable, however, and its net loss came in at $994 million in the first six months of 2021, compared with a loss of $377 million in the same period in 2020.
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12:08 p.m. ET: Biden says reversing elevated inflation is a 'top priority'
President Joe Biden said on Wednesday that he was committed to combatting rising prices, after new data showed consumer prices rose at their fastest pace in more than three decades.
“Inflation hurts Americans' pocketbooks, and reversing this trend is a top priority for me,” Biden said in a statement following the Bureau of Labor Statistics' October Consumer Price Index.
"The largest share of the increase in prices in this report is due to rising energy costs—and in the few days since the data for this report were collected, the price of natural gas has fallen," Biden added. "I have directed my National Economic Council to pursue means to try to further reduce these costs, and have asked the Federal Trade Commission to strike back at any market manipulation or price gouging in this sector."
He noted that other price increase reflected the "ongoing struggle to restore smooth operations in the economy" as supply chain snarls continue to weigh on corporate America. He noted he believed his more than $1 trillion infrastructure plan, which passed the House late last week, would help address these concerns.
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9:30 a.m. ET: Wall Street opens on a down note
Here were the main moves in markets as of 9:30 a.m. ET:
S&P 500 (^GSPC): 4,669.29, -15.96 (-0.34%)
Dow (^DJI): 36,305.21, -14.77(-0.04%)
Nasdaq (^IXIC): 15,720.30, -166.25 (-1.05%)
Crude (CL=F): $83.91 per barel, -$0.24 (-0.29%)
Gold (GC=F): $1,857.30 per ounce, +$26.50 (+1.45%)
10-year Treasury (^TNX): +0.43 bps to yield 1.4760%
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8:41 a.m. ET: Consumer Price Index posts biggest annual rise since 1990
The Consumer Price Index (CPI) jumped by a much bigger-than-expected margin in October compared to. last month and last year, with inflationary pressures continuing to weigh on the recovering economy.
The CPI rose 0.9% in October over September, the Bureau of Labor Statistics said Wednesday, accelerating from September's 0.4% monthly rise. Consensus economists were looking for a just 0.6% month-on-month increase in October, according to Bloomberg data.
Over last year, the broadest measure of CPI jumped 6.2%, or by the most since 1990.
Energy was a major contributor to the headline jump in CPI, with energy prices up 4.8% month-on-month, and fuel oil prices alone up 12.3%. Groceries also became more expensive, with food at home prices rising by 1.0%. Used car and truck prices rose 2.5% to reverse course after back-to-back months of price drops. The Bureau of Labor Statistics noted that airline fares and alcoholic beverages were two of the only categories to post price declines during the month.
Even excluding more volatile food and energy prices, consumer prices accelerated markedly last month. This so-called core measure of CPI was up 0.6% on a month-over-month in October, or three times September's 0.2% rise. And over last year, the core CPI rose 4.6%, or by the most since 1991.
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7:50 a.m. ET: Stock futures point to a lower open ahead of CPI data
Here's where markets were trading Wednesday morning:
S&P 500 futures (ES=F): -12.5 points (-0.27%), to 4,665.75
Dow futures (YM=F): -57 points (-0.16%), to 36,152.00
Nasdaq futures (NQ=F): -82.75 points (-0.51%) to 16,130.00
Crude (CL=F): -$0.46 (-0.55%) to $83.69 a barrel
Gold (GC=F): -$3.30 (-0.18%) to $1,827.50 per ounce
10-year Treasury (^TNX): +2.5 bps to yield 1.474%
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6:02 p.m. ET Tuesday: Stock futures drift lower ahead of inflation data
Here's where markets were trading Tuesday evening:
S&P 500 futures (ES=F): -3.75 points (-0.08%), to 4,674.50
Dow futures (YM=F): -33 points (-0.09%), to 36,176.00
Nasdaq futures (NQ=F): -16.5 points (-0.1%) to 16,196.25
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter