US close: Stocks fall as Powell warns of inflation

Wall Street's main market indices finished in negative territory on Thursday, after Fed chair Jerome Powell cautioned that inflation could rise as the American economy reopens.

The Dow Jones Industrial Average was down 1.11% at 30,924.14, the S&P 500 lost 1.34% to 3,768.47, and the Nasdaq Composite was off 2.11% at 12,723.47.

Powell said in his comments at an event hosted by the Wall Street Journal that he was expecting some inflationary pressure as the economy gathered pace again following the Covid-19 pandemic, though he didn’t think it would be enough to warrant a hike in interest rates.

“We expect that as the economy reopens and hopefully picks up, we will see inflation move up through base effects,” the Federal Reserve chair said.

“That could create some upward pressure on prices.”

Markets were seemingly unhappy with Powell’s comments, though, as stock prices slid and bond yields rose even further.

“It has been a closely-fought contest this afternoon between buyers and sellers ... ahead of a speech by Jerome Powell,” said IG chief market analyst Chris Beauchamp ahead of Powell’s comments.

“The speech has been invested with plenty of importance by markets, who are looking to the head of the Fed to provide some calming words, and if he fails to provide this then we could see the advantage handed back to the sellers.”

Earlier in the day, consultancy Challenger reported a 57% drop in the number of job cut announcements by US-based companies in February to reach 34,351 - the lowest level since December 2019.

That was followed by figures showing that the number of initial unemployment claims in the US rose unexpectedly during the week ending on 25 February, by 9,000 to reach 745,000, against consensus expectations for 710,000.

Those figures come ahead of the latest nonfarm payrolls report, due on Friday.

Ian Shepherdson at Pantheon Macroeconomics had been expecting worse from the initial unemployment claims numbers, as the dampening effect of the winter storms washed out of the data.

Still, he cautioned that while "we expect the trend to fall sharply over the next few months, provided the new Covid variants don’t trigger a spring wave in cases and, more importantly, hospitalisations."

"The jury is still out."

On the corporate side of things, shares of Apple were down 1.58% following reports of a probe by the UK's Competition and Markets Authority into the tech giant app store.

Dow Jones - Risers

Chevron Corp. (CVX) $104.50 0.88%
Unitedhealth Group Inc. (UNH) $333.81 0.28%
American Express Co. (AXP) $142.68 0.06%
Dowdupont Inc. (DWDP) $30.52 0.00%
Walmart Inc. (WMT) $127.53 -0.05%
Coca-Cola Co. (KO) $49.94 -0.08%
3M Co. (MMM) $177.63 -0.24%
Salesforce.Com Inc. (CRM) $205.23 -0.33%
Microsoft Corp. (MSFT) $226.73 -0.36%
McDonald's Corp. (MCD) $204.84 -0.48%

Dow Jones - Fallers

Intel Corp. (INTC) $58.33 -2.62%
Home Depot Inc. (HD) $250.93 -2.50%
Walt Disney Co. (DIS) $187.22 -2.20%
Johnson & Johnson (JNJ) $153.14 -2.02%
Honeywell International Inc. (HON) $202.94 -1.97%
International Business Machines Corporation (CDI) (IBM) $120.16 -1.84%
Dow Chemical Co. (DOW) $61.20 -1.69%
Boeing Co. (BA) $224.71 -1.68%
Nike Inc. (NKE) $132.04 -1.65%
Walgreens Boots Alliance, Inc. (WBA) $46.86 -1.62%

S&P 500 - Risers

Diamondback Energy Inc. (FANG) $81.26 9.16%
Eog Resources Inc. (EOG) $71.43 6.63%
Marathon Oil Corp. (MRO) $12.36 6.28%
Apache Corp. (APA) $20.98 5.37%
Hess Corp. (HES) $70.79 4.66%
Occidental Petroleum Corp. (OXY) $29.90 4.33%
Devon Energy Corp. (DVN) $23.58 4.10%
Exxon Mobil Corp. (XOM) $58.71 3.87%
ConocoPhillips (COP) $55.62 3.65%
Tyson Foods Inc. (TSN) $72.19 3.19%

S&P 500 - Fallers

Western Digital Corp. (WDC) $63.49 -8.87%
Freeport-McMoRan Inc (FCX) $32.70 -6.57%
Mosaic Company (MOS) $29.57 -6.31%
Paypal Holdings Inc (PYPL) $239.07 -6.27%
Applied Materials Inc. (AMAT) $108.24 -6.24%
HP Inc (HPQ) $28.07 -5.87%
Twitter Inc (TWTR) $66.75 -5.80%
Seagate Technology Plc (STX) $71.61 -5.70%
Microchip Technology Inc. (MCHP) $140.09 -5.58%
Micron Technology Inc. (MU) $84.33 -5.36%

Nasdaq 100 - Risers

Incyte Corp. (INCY) $77.50 1.95%
Mondelez International Inc. (MDLZ) $53.96 1.93%
Alphabet Inc. Class A (GOOGL) $2,033.93 1.12%
Alphabet Inc. Class C (GOOG) $2,049.09 1.10%
Charter Communications Inc. (CHTR) $607.64 1.10%
Ross Stores Inc. (ROST) $112.02 0.87%
Facebook Inc. (FB) $257.64 0.87%
Gilead Sciences Inc. (GILD) $63.23 0.76%
Regeneron Pharmaceuticals Inc. (REGN) $449.38 0.59%
NortonLifeLock Inc. (NLOK) $20.10 0.58%

Nasdaq 100 - Fallers

Western Digital Corp. (WDC) $63.49 -8.87%
Paypal Holdings Inc (PYPL) $239.07 -6.27%
Applied Materials Inc. (AMAT) $108.24 -6.24%
Baidu Inc. (BIDU) $260.59 -6.20%
Asml Holdings N.V. (ASML) $510.50 -6.09%
Seagate Technology Plc (STX) $71.61 -5.70%
Microchip Technology Inc. (MCHP) $140.09 -5.58%
Micron Technology Inc. (MU) $84.33 -5.36%
KLA-Tencor Corp. (KLAC) $287.62 -5.33%
Xilinx Inc. (XLNX) $117.12 -5.17%