The stock rose on Wednesday as investors tried to look past the latest U.S. inflation data.
The S&P 500 traded flat while the Nasdaq Composite fell 1%, and the Dow Jones Industrial Average advanced 60 points, or 0.2%.
“I think there’s a hope, and I’m emphasizing the hope, that we’ve seen a change in the rate of change in the CPI,” said Peter Bookver of Blakeley Advisory Group.
Chevron was the best performing Dow stock, rising nearly 3%. Mark shares also popped up more than 2%. Energy led the S&P 500, with the sector jumping nearly 3%, while utilities and materials each gained more than 1%.
Some tech stocks have fought for Nasdaq, gaining tampering. Meta Platform, Microsoft and Netflix each lost about 2%.
“There’s a lot of bad news out there, so it doesn’t surprise me that we don’t have a lot of sales,” said Kathy Bostjansic of Oxford Economics.
The April consumer price index jumped 8.3%, higher than the 8.1% growth expected by economists surveyed by the Dow Jones. The price rise in March was close to 8.5% of the 40-year high. Core CPI, which does not include food and energy prices, gained 6.2% compared to 6% expectations. On a monthly basis, headline CPI rose 0.3% and core rose 0.6%.
“I think it’s a classic case where you ignore the title and see the details,” said Jeffrey Roach of LPL Financial. “I think the market had a lot of trouble trying to understand the report,” although the data confirms that inflation is probably going to the top.
He pointed to rising aircraft prices and hotel prices as a sign of comfort from products to experience and sustainable products.
Not all analysts are sure that data is a sign of maximum inflation.
“With the annual rate dropping from 8.5% to 8.3%, it may be tempting to say that we’ve seen the peak, but we’ve had a head start as early as last August,” said Greg, chief financial analyst at Bankret. McBride
Meanwhile, rising prices have been on the mind, especially as the Federal Reserve raises interest rates and cuts its balance sheet to tackle inflation.
After the release of the data, the 10-year Treasury yield briefly jumped above the 3% mark again but traded at 2.948%.
Some analysts see the data as a sign that the Fed is behind the curve in controlling inflation, which could put pressure on the central bank to make monetary policy more aggressive.
“Assuming that risk assets are under pressure with equity futures red, this will force the Fed to extend the 50 bp cadence outside of the June / July meeting,” said Ian Linzen, head of US-based BMO.
The initial negative market reaction to the inflation print, which saw all major indicators “fully understandable”, but as prices continue to rise, the United States is on the brink of a “cost of living crisis,” Mohamed El-Arian, Allianz’s chief economic adviser, told CNBC.
“It’s just a matter of time until we talk about the crisis of life and that’s it,” he said. “Everyone is focusing on the headline number, it’s understandable but look at the core, 6.2%, and look at the combination of inflation which suggests that there are more drivers now. Is lagging behind in a major way. “
The S&P 500 has closed about 16% of its high in a pullback this year, largely driven by fears of out-of-control inflation, which has led the Federal Reserve to aggressively tighten monetary policy.
On the earnings front, shares of Coinbase have fallen more than 23% since the crypto exchange posted its latest quarterly results, with Roblox adding 10.5%. Investors are waiting hours for reports from Walt Disney, Revian and Beyond Meet.
Wednesday’s move comes after the Dow fell for the fourth day in a row in a volatile trading session alternating between gains and losses. The S&P 500 rose 0.25% and the Nasdaq Composite rose about 1%.
– Contributed to CNBC’s Eun Lee report