The Dow Jones Industrial Average gave up early gains and traded at session lows into Wednesday's closing bell. The blue-chip index fell nearly 2%, taking it below the 50-day moving average.
The S&P 500, which had gained 0.5% early, was down by 1.5% at 4 p.m. ET. The Nasdaq lost over 1%. Both indexes are testing their 50-day lines. Cooling inflation is being viewed as a mixed signal in the rapidly slowing economy.
The small-cap Russell 2000 also declined by about 1.5%. The Innovator IBD 50 ETF posted a 0.8% loss in Wednesday's trading.
Volume on the NYSE and on the Nasdaq was higher vs. the same time on Tuesday.
On Wednesday, the International Energy Agency said it expects record demand for oil as China moves past its Covid lockdown. Still, crude oil fell more than 1% to trade at $79.53 a barrel.
The yield on the 10-year Treasury note fell 16 basis points to 3.37%, a four-month low.
Stocks Moving Today
SLB is in a buy zone from a buy point of 56.14. Earnings are due Friday. Oneok is in a buy zone from a flat base but is falling back toward the 68.27 buy point.
Axon is building a cup base with a buy point of 193.95. It has fallen 1% and may offer a handle and lower entry in coming sessions. Medpace is approaching a 235.82 buy point in a consolidation. Axon and Medpace are IBD Leaderboard stocks. MEDP gained 1.5% in today's session.
Charles Schwab fell 2.5% after earnings missed analysts' expectations. For the fourth quarter, the Westlake, Calif.-based brokerage netted revenue of $5.49 billion and earnings of 97 cents per share. For the year, revenue grew 12% to $20.8 billion, while earnings booked $3.50 per share. Schwab is also on the IBD 50.
Dow Jones leader Johnson & Johnson is on pace for a seven-day losing streak and total loss over 5%. Shares have fallen below their 50- and 200-day lines.
Shares of Tesla dived 2% as a securities fraud trial begins in San Francisco this week. The litigation involves Tesla CEO Elon Musk's tweet from 2018 about taking the EV company private. The tweet is alleged to have triggered stock and options swings that hurt investors.
Netflix is on tap with earnings Thursday. Shares were flat at closing bell and above their 50-day moving average.
Market Reverses Lower On Hawkish Fed, Weak Economic Data
Dow Jones Leaders
Among tech stocks in the Dow, Apple fell fractionally after nearing its 50-day line. Salesforce continues to hold above its 50-day line while energy giant Chevron tests its 50-day. Health care stocks UnitedHealth and Merck were down over 1%.
Inflation Cooling; Bullard Calls For Higher Target Rate
Signs of inflation cooling strengthened on Wednesday. Retail sales fell 1.1% in December after a lackluster holiday season. It was the sharpest fall in 2022 and followed November's 1% decline. Plunging auto sales and falling gas prices drove the downside.
The producer price index fell 0.5% after a 0.2% increase in November. Goods fell 1.6% while services rose 0.1%. Nonetheless, St. Louis Fed President James Bullard insisted that rates would have to rise more to ensure that inflation continues to recede. He still believes in a soft landing.
In an interview with the Wall Street Journal Wednesday, the Fed official targeted interest rates of 5.25%-5.5% for year-end, up from the current 4.25%-4.5%.
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