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U.S. stocks wavered Wednesday as investors digested data that showed inflation slowed to its slowest annual rate of increase in two years.

The S&P 500 (^GSPC) ticked above the flatline, while the Dow Jones Industrial Average (^DJI) slipped 0.41% or more than 100 points. The technology-heavy Nasdaq Composite (^IXIC) rose 0.62 % at around 12:14 pm ET.

The highlight for Wall Street was economic data that showed the consumer index rose at a quicker monthly pace in April, pushed by soaring costs for used cars and trucks and housing, the latest sign that inflation remains sticky. CPI rose 0.4% in April, faster than the 0.1% rise from the previous month.

In the 12 months through April, headline inflation increased to 4.9%, lower than the forecasted 5%. April’s Core CPI, which excludes energy and food prices that can be volatile month-to-month, rose 0.4% in April, matching the prior month’s pace. In the year ending in April, core CPI increased 5.5%, compared to 5.6% in March, and in line with economist expectations.

The report could add to expectations that the Fed will pause its rate-hiking campaign at its next meeting in June. Analysts at JPMorgan said Wednesday they expect the market to refocus on “recent Fedspeak which remains hawkish despite the Fed’s data dependent approach.” On Wednesday, New York Fed President John Williams noted that inflation remains “too high.”

Also on Tuesday, President Joe Biden met with House Speaker Kevin McCarthy and other top congressional leaders for a high-stakes talk on the nation’s debt limit. The conversation yielded little apparent progress, but both sides are scheduled to meet again on Friday.

Government bonds were lower. The yield on the 10-year yield traded down to 3.45%, compared to the two-year note yields fell to 3.94%. The dollar index edged down, and gold prices fell as well.

In single-stock moves, shares of Airbnb (ABNB) sank over 10% after the booking platform recorded its best quarter yet but the company forecasted lower revenues in the next quarter amid a plan to make the platform feel affordable again.

Twilio Inc. (TWLO) shares tumbled 17% following the software company issuing a forecast for sales of $980 million to $990 million in its fiscal second quarter, below analysts’ forecasts of $1.05 billion.

Shares of Rivian Automotive, Inc. (RIVN) rose after the EV maker reported a quarterly loss that was narrow for a year ago, while maintaining its production outlook of 50,000 vehicles for the year.

A Warren Buffett favorite, Occidental Petroleum, (OXY) said first-quarter earnings slipped from a year ago and adjusted profit missed analysts’ expectations as oil and gas sales declined due to reduced energy prices. The stock was down over 3%.

Icahn Enterprises LP said on Wednesday that the U.S. Attorney for the Southern District of New York requested information on a range of issues, including valuation and governance. The stock sank over 18%.

Upstart Holdings, Inc. (UPST) rallied over 30% Wednesday after the artificial intelligence lending platform announced an upbeat revenue outlook for its fiscal second quarter.

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Stocks Waver as Inflation Drops Below 5% Level: Stock Market News Today | May 10, 2023

In a surprising turn of events, the stock market experienced some wavering today as inflation rates dropped below the 5% level. This unexpected development sent shockwaves through the investment community, causing some uncertainty and volatility in the market. Here is a breakdown of what this means and how it may impact investors.

Inflation, the rate at which prices for goods and services rise, has been a major concern for investors in recent months. With fears of runaway inflation and its potential impact on profitability, many investors have been closely monitoring inflation indicators for any signs of relief. Today’s drop below the 5% level was a welcome surprise for those worried about rising costs.

Lower inflation rates have several potential implications for the stock market. Firstly, it can signal increased confidence in the economy, as lower inflation typically suggests stable economic growth. This can encourage investors to buy stocks, boosting market sentiment and activity. Additionally, lower inflation can reduce production costs for companies, potentially improving their profit margins and attracting more investors.

However, it’s important to note that the stock market response to this development was not entirely positive. The wavering in stocks today indicates that investors are grappling with conflicting sentiments. On one hand, lower inflation is generally seen as a positive factor for the stock market. On the other hand, there may be concerns about the potential impact on the Federal Reserve’s monetary policy and future interest rate hikes.

The Federal Reserve has been closely monitoring inflation levels and has indicated that it may need to raise interest rates to combat any excessive rise in prices. While lower inflation may temporarily alleviate this concern, it could also complicate the central bank’s decision-making process. If inflation remains persistently low, it may lead to a more prolonged period of low interest rates, which could have repercussions for the stock market.

Furthermore, investors should keep in mind that today’s drop in inflation levels does not necessarily guarantee a long-term trend. Inflation rates can be influenced by multiple factors, including government policies, global economic conditions, and supply chain disruptions. Therefore, it is crucial to maintain a cautious approach and closely monitor future developments to make informed investment decisions.

In conclusion, the stock market experienced some wavering today as inflation rates dropped below the 5% level. While this unexpected development is generally seen as positive for the stock market, it also raises questions and potential concerns about the Federal Reserve’s monetary policy and the trajectory of interest rates. Investors should exercise vigilance and stay informed to navigate the evolving market conditions successfully.