NEW YORK (AP) — Stocks are off to another weak start on Wall Street Thursday as more declines in big technology companies weighed on the broader market. Investors got another dire readout on inflation as the government reported that wholesale prices soared 11% in April from a year earlier. The report on the producer price index did contain some signs that price increases are moderating. Disney fell 4.8% after missing analysts’ forecasts in its latest earnings report, while plant-based food maker Beyond Meat slumped 13% after reporting a much bigger loss than Wall Street was expecting. The yield on the 10-year Treasury note fell to 2.85%.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Wall Street pointed toward another down day when markets open Thursday following the release of more evidence of stubborn inflation that has already led to sell-offs in Asia and Europe.
Futures for the S&P 500 were 0.5% lower and the Dow industrials lost 0.3% a day after a U.S. government report showed inflation remains close to a four-decade high.
Inflation slowed a touch in April, down to 8.3% from 8.5% in March, according to the U.S. Labor Department., but the decline was smaller than hoped for and it reinforced expectations that the Federal Reserve will continue to raise interest rates to counter rising prices.
Economists expect U.S. data being released Thursday will reveal that the costs of goods before they reach consumers, called producer prices, continue to rise. Those costs can be passed on to consumers as companies are forced to cover higher expenses.
Also on Thursday, Britain said its economy grew at the slowest pace in a year during the first quarter as retailers and manufacturers struggled with supply disruptions and higher prices. That is raising fears that the country may be headed for a recession.
Gross domestic product, the broadest measure of economic activity, rose 0.8% in the period, slowing from 1.3% in the previous quarter, the Office for National Statistics said Thursday. Retail sales figures show British consumers are already cutting spending. Economists forecast the U.K. will see the biggest drop in living standards in more than six decades this year.
Britain’s FTSE 100 lost 2% in midday trading, Germany's DAX fell 1.8%, while the CAC 40 in Paris lost 2.1%.
In Asia, a pledge by Chinese leaders of more support for the slowing economy appeared to have little impact.
Hong Kong’s benchmark fell 2.2% to 19,380.34 following the arrests of several prominent democracy advocates, including a retired Roman Catholic cardinal.
The arrests of Cardinal Joseph Zen, singer Denise H o and others followed the choice last weekend of a hardline chief executive for the semi-autonomous Chinese territory, where Beijing has been tightening controls after taking control of the former British colony in 1997.
In other Asian trading, Tokyo’s Nikkei 225 gave up 1.8% to 25,748.72.
The Shanghai Composite index shed 0.1% to 3,054.99. Australia’s S&P/ASX 200 lost 1.8% to 6,941.00. South Korea’s Kospi slipped 1.6% to 2,550.08.
Economists said the U.S. inflation report will keep the Fed on track for rapid and potentially sharp increases in interest rates in upcoming months.
To corral high inflation, the Fed has already pulled its key short-term interest rate off its record low near zero, where it spent most of the pandemic. It also said it may continue to hike rates by double the usual amount at upcoming meetings.
Such moves are designed to slow the economy to help quash inflation, but the Fed risks causing a recession if it raises rates too high or too quickly. Higher rates tend to pull prices for stocks and all kinds of investments lower in the meantime. Higher-yielding, safe Treasury bonds, for example, become more attractive to investors.
Higher rates make big technology companies, other high-growth stocks and even cryptocurrencies relatively less appealing.
Bitcoin continued its slide, falling to around $25,000 at one point Thursday, dragging a slew of other digital currencies down with it. Bitcoin has lost 28% of its value in the past week alone and is off 60% from highs near $70,000 late last year.
In other trading, benchmark U.S. oil dropped $1.26 to $104.45 per barrel in electronic trading on the New York Mercantile Exchange. It gained 6% on Wednesday.
Brent crude, the international pricing standard, shed $1.41 to $106.10 per barrel. It added 4.9% the day before.
The dollar slipped to 128.58 Japanese yen from 129.95 yen. The euro fell to $1.0408 from $1.0517.