Dow falls 100 points Tuesday as traders brace for key U.S. inflation report: Live updates

How much the March consumer price index, due out Wednesday, deviates from projections could spark a major move in stocks, according to JPMorgan. A hotter print could trigger a pullback at a time when many worry that equities have run too far, while a cooler print could spur a stock rally.

Read on for five possible scenarios on how the S&P 500 could trade post CPI.

— Sarah Min

Here are the stock’s making the biggest moves during midday trading:

• Boeing — The airplane maker was down more than 2% after a New York Times report said regulators were investigating claims from a whistleblower about flaws in the company’s 787 Dreamliner.
• Norfolk Southern — The railroad stock gained 1%. Norfolk Southern announced that it reached a $600 million settlement related to its derailment in East Palestine. The company also posted preliminary first-quarter earnings.

Read the full list of companies on the move here.

— Samantha Subin

The financials sector dropped around 1% Tuesday, making it the S&P 500’s biggest sector laggard.

Technology and industrials were the following biggest sector losers for the day, falling 0.7% each.

The only three positive positive sectors were real estate, utilities and consumer staples. Real estate gained 0.7%, while utilities and consumer staples rose less than 0.1%.

— Hakyung Kim

The prospect of interest rates remaining higher for longer without a cut from the Federal Reserve in 2024 could dampen gains for the Russell 2000, according to Bank of America.

“In our view, the longer the first cut gets pushed out, the lower investors’ confidence that cuts will happen, making broader Russell 2000 leadership challenging and suggesting greater selectivity in small caps in sectors that may be less impacted, including Industrials/Materials/Energy (which can still benefit from improving GDP/a manufacturing recovery but are less at risk from refinancing),” BofA equity and quantitative strategist Jill Carey Hall wrote in a Tuesday note.

Interest rate cuts are of particular importance for small cap stocks today, Hall added, due to the necessity for refinancing of debt throughout the sector. She says more than 40% of small cap stocks have balance sheet debt abiding by short-term, floating interest rates.

“We estimate a 32% hit to operating earnings over the next five years if rates stay at current levels vs. 24% if rates are cut 3x this year/4x next year (BofA forecast), with the biggest impacts at the sector level in real estate,” she said.

— Brian Evans

Boeing airplane deliveries dropped in the first quarter as the company faces increased scrutiny after a door plug blew out from one of its 737 Max 9 planes midair in January.

The company handed over 83 planes in the three months ended March 31, most of them 737s, compared with 157 in the prior quarter and 130 planes in the year-earlier period. Solely in March, Boeing delivered 29 planes.

Shares dipped 0.1%.

— Leslie Josephs, Sarah Min

Crude oil futures fell for a second day Tuesday as the recent rally paused while traders took stock of where the conflict in Middle East was heading.

The West Texas Intermediate contract for May delivery fell 67 cents, or 0.78%, to $85.76 a barrel. The June Brent futures contract lost 49 cents, or 0.54%, to $89.89 a barrel.

Crude prices settled lower Monday after Israel reduced its forces in Gaza over the weekend, suggesting the country’s military campaign might transition to a more limited phase.

But Barclays head of equity derivatives strategy Stefano Pascale said there are still upside risks to oil prices, particularly from geopolitical tensions in the Middle East, despite the recent rally taking a pause.

“Further melt-up may reawaken inflationary concerns, derailing the equity rally,” Pascale told clients in a note Tuesday. 

— Spencer Kimball

Ahead of Wednesday’s consumer price index report, one investor warns that any data outside of Wall Street’s expectations could lead to turbulence in the markets.

“Valuations are so stretched right now that anything less than perfection from economic data or any geopolitical noise can create substantial and quick selloffs,” said David Bahnsen, chief investment officer at The Bahnsen Group.

To be sure, he added that the current market “touchiness” shouldn’t be confused for directional weakness. Despite lower expectations for Federal Reserve rate cuts this year, equities have remains relatively strong this year, Bahnsen added.

— Hakyung Kim

Alphabet shares gained more than 2% ahead of the company’s Google Cloud Next Event keynote on Tuesday.

Earlier in the day, the company unveiled new custom Arm-based chips, taking a cue from Microsoft and Amazon, which have undertaken similar strategies.

At the event, Wall Street is bracing for more updates to its Gemini large language model, and AI features to improve workspace productivity, cybersecurity and partnerships. Some notable conference speakers include Palo Alto Networks CEO Nikesh Arora and Anthropic CEO and co-founder Dario Amodei.

U.S. stocks began Tuesday’s trading session in the green.

The Dow Jones Industrial Average added 92 points, or 0.2%.

The S&P 500 and Nasdaq Composite rose 0.3% and 0.5%, respectively.

— Hakyung Kim

Gold prices on Tuesday hit a record high for the eighth straight trading session. Gold futures reached a new record at 2,384.5.

— Sarah Min, Gina Francolla

Blame it on the solar eclipse.

New York Stock Exchange volume sank to just 7.99 billion shares on Monday, the slowest trading day of the year thus far and lowest volume since 6.62 billion shares were traded on Dec. 28, 2023.

Daily NYSE volume is down an average 22.15% over the past five days, lower by 15.33% in the past month and almost 15% in the past six months, according to Factset. Year-to-date NYSE volume is off 8.3%.

Less than a month ago, on March 15, NYSE volume reached 38.1 billion shares, nearly matching the 52-week high of 38.48 billion set last Dec. 15, 2023. Both those came on “triple witching” days, when stock options and index futures expire and send trading volume soaring.

— Scott Schnipper

Check out the companies making headlines before the bell:

• American Eagle Outfitters — Shares popped 4% following an upgrade by JPMorgan to overweight from neutral. The firm cited the retailer’s merchandising initiatives and operational changes for the call.
• Freeport-McMoRan — Shares jumped 1.9% after Bank of America upgraded the American mining company to buy from neutral, saying it has “blue chip copper exposure.”
• Molson Coors — Shares gained 1.9% after Goldman Sachs upgraded the brewing company to buy, saying the company can benefit as it expands its shelf space in retailers.

Read the full list here.

— Sarah Min

Although U.S. tech stocks have pulled back in recent weeks, with semiconductor companies lagging in particular, UBS says it remains positive on AI-related stocks.

AI demand is showing signs of broadening out beyond GPU computing, the firm wrote in a Tuesday note. New AI application launches and increasing adoption of AI across businesses contributes to the firm’s constructive view on the AI theme.

“In our view, the semiconductor and software industries offer the best opportunities for investors over the course of this year,” a group of strategists said in the note.

— Hakyung Kim

Although the recent volatility in oil prices has eased, several upward pressures still persist, including geopolitical tensions and rising global demand, according to Barclays.

Strategist Stefano Pascale said that a “further melt-up” could re-ignite inflation concerns and weigh upon the equity rally.

“History shows that investors cannot take for granted that the oil/equity correlation will stay positive, especially when worries of a potentially oil-induced inflation rebound remain acute. Additionally, geopolitical risks in the Middle East have shown no signs of abating, in spite of the brief oil rally pause,” Pascale wrote in a Tuesday note.

— Hakyung Kim

European stocks were slightly lower early Tuesday, with the pan-European Stoxx 600 index down by 0.15% at 8:20 a.m. in London.

Major bourses were in the red, with Germany’s DAX down 0.4% and France’s CAC 40 lower by 0.25%. The U.K.’s FTSE 100 nudged 0.08% lower.

Hong Kong’s monetary authority is reportedly considering deepening some of the investment connection schemes between the city and mainland China.

Speaking at the HSBC Global Investment Summit in Hong Kong, HKMA Chief Executive Eddie Yue said that there was capacity for greater “south bound” activity into Hong Kong, according to a Reuters report.

Yue told the HSBC Global Investment Summit in Hong Kong there was capacity for greater “southbound” activity from Chinese investors into Hong Kong’s financial markets.

The so-called northbound trading in the connect schemes allows offshore investors to buy China-listed products via Hong Kong, while southbound trading is designed for China-based investors to buy into Hong Kong products.

— Reuters

Lee Boo Jin, the CEO of South Korean hotel group Shilla Hotels, has sold about 5.2 million shares of electronics giant Samsung Electronics in a $326 million block sale, with the shares priced at 84,100 won apiece, according to Reuters.

A block sale is a large securities transaction at a negotiated price that tends to shield or lessen the impact of the sale on the price of the publicly traded stock.

South Korean media reported that the sale was to cover inheritance tax liabilities after the death of former Samsung chairman Lee Kun-hee.

The younger Lee is the late Lee Kun-hee’s eldest daughter, and also the younger sister of Samsung Electronics Executive Chairman Lee Jae-yong.

— Lim Hui Jie, Reuters

South Korean automakers Hyundai and Kia have signed a memorandum of understanding with Indian battery company Exide Energy for strategic co-operation in India’s EV market.

Exide said that both the parties will work together for the development, production and supply of battery cells for Hyundai Motor’s electric vehicles in the Indian market.

Hyundai said the move will position the company and Kia as “pioneers in applying domestically produced batteries” in their upcoming EV models in the Indian market.

Hyundai stock was down 0.55% on Tuesday, while Kia shares rose 0.65%.

— Lim Hui Jie

The U.S. government plans to offer $6.6 billion in subsidies to South Korea’s Samsung Electronics for expanding its chip output in Texas, according to a report by Reuters.

The report said the subsidy will go toward the construction of four facilities in Taylor, including one $17 billion chipmaking plant that Samsung announced in 2021.

The subsidy will also be for investment in an undisclosed location and Samsung will more than double its investment in the U.S. to over $44 billion as part of the deal, according to the report.

Samsung shares were mostly flat on Tuesday.

— Lim Hui Jie, Reuters