Nasdaq ends down 3.2% as US stocks slump after inflation data

Traders work on the floor of the New York Stock Exchange, on May 11, 2022. PHOTO: REUTERS

NEW YORK (AFP) - Tech-linked shares slumped, leading the market lower on Wednesday (May 11) as Wall Street stocks suffered another bruising round of losses following the latest report showing US consumer prices remain elevated.

The Nasdaq Composite Index slid 3.2 per cent to end at 11,364.24 behind big drops in Apple, Facebook-parent Meta and other tech names.

The Dow Jones Industrial Average lost 1 per cent to finish at 31,834.11, while the broad-based S&P 500 dropped 1.7 per cent to 3,935.18.

With stocks under pressure for much of 2022, markets had been looking to the morning's consumer price report in hopes that easing inflation would lower pressure on the Federal Reserve to hike interest rates.

While the annual inflation slowed slightly in April, the month-over-month increase in prices exceeded expectations. Overall, prices are up 8.3 per cent over the last 12 months.

Markets viewed the report as largely disappointing, setting the stage for more Fed tightening, said Art Hogan, strategist at National Securities.

"The growth trade led us lower," said Hogan, who described Apple's 5.2 per cent slide to US$146.50 as a result of automatic "sell" orders triggered after shares slipped below US$150.

Other tech names with big losses included Meta, down 4.5 per cent, Netflix, down 6.4 per cent, and Tesla, down 8.3 per cent.

An exception among tech companies was Electronic Arts, which surged 8 per cent after reporting better-than-expected profits on higher net bookings and revenues tied to its videogame business.

Coinbase Global plunged 26.4 per cent after the cryptocurrency trading platform's latest quarter saw a drop in trading volumes and users compared with the previous quarter.

Duke Realty jumped 7.8 per cent after it rejected an unsolicited US$24 bid from Prologis to acquire the logistics-oriented real estate company, calling the bid "insufficient."

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