Stocks took a dive on Wednesday as the Dow Jones Industrial Average fell 1.09%, the S&P 500 dropped 0.95%, and the Nasdaq Composite tumbled 0.84%. This decline came after the consumer price index for March came in hotter than expected, with a 0.4% increase from the previous month and a 3.5% increase year over year. The core CPI, which excludes volatile food and energy prices, also accelerated, rising 0.4% from the previous month and 3.8% from a year ago. The 10-year Treasury yield also rose above 4.5% after the inflation report was released.
Federal Reserve members are looking for more confidence that inflation is easing and moving towards the 2% target. Policymakers had a long discussion at their March meeting about rising costs, geopolitical turmoil, and higher energy prices. While the central bank decided to keep interest rates the same for now, they still plan to cut rates at some point this year. However, inflation has been running hotter than many members would prefer. Following the release of the CPI report, the CME Group’s FedWatch tool showed a dramatic shift in the probability of a rate cut at the upcoming meetings, with traders now thinking there’s a slim chance of a rate cut in June.
Amazon CEO Andy Jassy released his annual shareholder letter, emphasizing a commitment to cost-cutting while continuing to invest in growth areas like artificial intelligence. Since taking over as CEO in 2021, Jassy has focused on making Amazon leaner and shifting away from the relentless growth pursued by former CEO Jeff Bezos. Amazon recently underwent its largest layoffs in the company’s history, cutting over 27,000 jobs, as part of efforts to streamline operations and drive efficiency.
Trump Media stock experienced an 8% decline, bringing the company’s market capitalization below $4.7 billion. The company, which owns the Truth Social app, has seen its shares drop nearly 45% month to date. Former President Donald Trump, the company’s biggest shareholder, saw the value of his shares drop significantly, from over $5 billion to less than $2.7 billion in just two weeks. This decline comes after a rocky start for the company following its initial public offering.
Department store Macy’s settled a proxy fight with real estate investor Arkhouse by adding two Arkhouse nominees to its 15-person board. This move brings the 165-year-old retailer closer to the possibility of a sale that could take the company private. The new directors will be part of the committee reviewing Arkhouse’s bid to buy the company, which has been increasing its offer to take Macy’s private since late last year. The settlement reflects the ongoing efforts by Macy’s to navigate challenges in the retail industry and explore strategic options for growth.
In summary, the recent market news highlights the impact of inflation on stocks, the Federal Reserve’s concerns over rising costs, Amazon’s focus on cost-cutting and growth, the struggles of Trump Media following its IPO, and Macy’s efforts to address challenges through board reshuffling and potential sale discussions. These developments reflect the dynamic nature of the financial markets and the strategic decisions being made by companies and investors to navigate current economic conditions. Investors should remain vigilant and stay informed about market trends to make well-informed trading decisions.
