WASHINGTON (dpa-AFX) - After moving to the upside early in the session, stocks gave back ground over the course of the trading day on Wednesday. The major averages pulled back well off their early highs and the session in negative territory.
The tech-heavy Nasdaq fell 99.11 points or 0.5 percent to 19,615.88, the S&P 500 dipped 16.57 points or 0.3 percent to 6,022.24 and the Dow edged down 1.10 points or less than a tenth of a percent to 42,865.77.
The downturn on Wall Street may have reflected profit taking after the early advance lifted the major averages to their best intraday levels in over three months.
The early strength in the markets came following the release of a closely watched Labor Department report showing U.S. consumer prices increased by slightly less than expected in the month of May.
The Labor Department said its consumer price index inched up by 0.1 percent in May after rising by 0.2 percent in April. Economists had expected another 0.2 percent increase.
Meanwhile, the report said the annual rate of consumer price growth accelerated to 2.4 percent in May from 2.3 percent in April. The annual rate of consumer price growth was expected to speed up to 2.5 percent.
Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in May after edging up by 0.2 percent in April. Economists had expected core consumer prices to rise by another 0.2 percent.
The annual rate of core consumer price growth in May was unchanged from the previous month at 2.8 percent, while economists had expected the annual rate of core consumer price growth to accelerate to 2.9 percent.
Buying interest was also generated after U.S. and Chinese officials announced an agreement in principle on a framework to ease trade disputes between the two economic superpowers.
The plan is subject to approval by President Donald Trump and his Chinese counterpart Xi Jinping, Commerce Secretary Howard Lutnick told reporters.
Without specifying the terms of the framework, Lutnick indicated that both sides agreed to lift export controls on key goods and technologies.
In a subsequent post on Truth Social, Trump said the deal calls on China to supply full magnets and 'any necessary rare earths' up front.
'WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%,' Trump added. 'RELATIONSHIP IS EXCELLENT!'
Sector News
Airline stocks showed a substantial move to the downside over the course of the session, with the NYSE Arca Airline Index plunging by 3.4 percent.
Significant weakness also emerged among steel stocks, as reflected by the 1.5 percent loss posted by the NYSE Arca Steel Index.
Housing and retail stocks also saw notable weakness as the day progressed, while energy stocks turned in a strong performance amid a surge by the price of crude oil.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index climbed by 0.6 percent, while Hong Kong's Hang Seng Index advanced by 0.8 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the German DAX Index dipped by 0.2 percent and the French CAC 40 Index fell by 0.4 percent.
In the bond market, treasuries showed a strong move to the upside following the inflation data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 6.2 basis points to 4.412 percent.
Looking Ahead
Trading on Thursday may be impacted by reaction to the latest U.S. economic data, including reports on producer price inflation and weekly jobless claims.
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