U.S. stocks ended sharply lower on Wednesday, with the Nasdaq dropping more than 3% and the Dow falling for a fifth straight day after U.S. inflation data did little to ease investor worries over the outlook for interest rates and the economy.
The benchmark S&P 500 lost 1.7% and is now down 18% from its Jan. 3 record closing high.
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The CPI increased 0.3% last month, the smallest gain since last August, while economists polled by Reuters had forecast consumer prices gaining 0.2% in April.
"It did not dispel the notion that there's more to go in terms of reining in inflation," said Quincy Krosby, chief equity strategist at LPL Financial in Charlotte, North Carolina.
"The market is trying to make sense of whether we're also going to see growth pullback more than expected" as the Fed raises rates, she said.
Apple AAPL.O shares dropped 5.2% and were the biggest weight on the Nasdaq and S&P 500 indexes.
"There is much focus right now on Apple," Krosby said. "Given its weighting, Apple is the bellwether for the market from many perspectives."
Investor concerns about whether the Fed will continue to hike interest rates aggressively have hit growth stocks especially hard. The consumer discretionary .SPLRCD and technology .SPLRCTsectors fell about 3% each, leading S&P 500 sector declines.
The Dow Jones Industrial Average .DJI fell 326.63 points, or 1.02%, to 31,834.11, the S&P 500 .SPX lost 65.87 points, or 1.65%, to 3,935.18 and the Nasdaq Composite .IXIC dropped 373.44 points, or 3.18%, to 11,364.24.
The Dow's five-day decline was its longest losing streak since mid-February.
Energy .SPNY shares ended higher and helped to limit some of the declines in the S&P 500 and Dow. Exxon Mobil Corp XOM.N shares were up 2.1%.
Value outperformed growth shares in general. The S&P growth index .IGX was down 2.8% on the day versus a 0.5% decline in the S&P value index .IVX.
Investors are anxious to see more data on inflation Thursday, when U.S. producer price index data is due.
Stocks have fallen this year following the rate concerns, as well as the Ukraine war and the latest coronavirus lockdowns in China.
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Volume on U.S. exchanges was 15.38 billion shares, compared with the 12.75 billion average for the full session over the last 20 trading days.
Declining issues outnumbered advancing ones on the NYSE by a 2.16-to-1 ratio; on Nasdaq, a 3.70-to-1 ratio favored decliners.
The S&P 500 posted 1 new 52-week highs and 67 new lows; the Nasdaq Composite recorded 10 new highs and 1,221 new lows.
(Reporting by Caroline Valetkevitch; additional reporting by Amruta Khandekar, Devik Jain in Bengaluru and Sinéad Carew in New York; Editing by Arun Koyyur and Aurora Ellis)