Stocks took a dive on Wednesday after March inflation data came in higher than expected. The Dow Jones Industrial Average fell 1.09%, the S&P 500 dropped 0.95%, and the Nasdaq Composite tumbled 0.84%. The consumer price index increased by 0.4% in March and 3.5% year over year, surpassing estimated increases of 0.3% and 3.4%, respectively. Core CPI, which excludes volatile food and energy prices, also exceeded expectations by accelerating 0.4% from the previous month and rising 3.8% from a year ago. The 10-year Treasury yield, a benchmark for loans, climbed back above 4.5% following the inflation report.
Federal Reserve members are cautious about rising inflation and want to ensure it is moving towards the 2% target. While the central bank opted to keep interest rates unchanged at their March meeting, they discussed rising costs, geopolitical turmoil, and higher energy prices. The Fed still plans to cut rates from the current benchmark rate of 5.25%-5.5% at some point this year. However, inflation has been running hotter than many members would prefer. Market analysts noted a shift in trader sentiment after the CPI release, with the probability of a rate cut at the June meeting slimming.
Amazon CEO Andy Jassy released his annual shareholder letter, emphasizing cost-cutting measures while investing in growth areas like artificial intelligence. Under Jassy’s leadership, Amazon has become leaner and pivoted towards sustainable growth rather than unrestrained expansion. The company enacted its largest layoff in history, cutting over 27,000 jobs from the end of 2022 through 2023. Jassy’s commitment to efficiency and innovation was highlighted in the shareholder letter, reflecting his strategic vision for Amazon’s future.
Trump Media stock experienced an 8% decline on Wednesday, reducing the company’s market capitalization to under $4.7 billion. The company, which owns the Truth Social app, has seen a nearly 45% drop in share price month-to-date, closing at $34.26 per share. Former President Donald Trump, the company’s largest shareholder, saw the value of his shares diminish to less than $2.7 billion at the close of trading. This marked a significant decrease from the over $5 billion value his shares held just two weeks prior.
Macy’s has settled a proxy fight with real estate investor Arkhouse, agreeing to add two of Arkhouse’s nominees to its 15-person board. The move brings the department store closer to a potential sale that could take the company private. The new directors will be involved in reviewing Arkhouse’s offer to acquire the retailer. Arkhouse, initially a real estate investor turned activist, first expressed interest in privatizing Macy’s late last year and subsequently raised their offer multiple times. The addition of Arkhouse’s nominees to Macy’s board signals a potential transformation in the company’s ownership and strategy.
