Inflation surges, oil jumps, Apple in focus
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High gas prices are leading some people to look at other transportation options. Electric cars are one alternative. But some people are now turning to electric scooters.
RIA Advisors CIO Lance Roberts provides insight on the market's monetary policy and what influences investing decisions on "Making Money."
Inflation may have consumers re-thinking whether they need that used car.
CarMax experienced a slowdown in fourth-quarter used car sales volume as its average retail selling price jumped 39.7% year-over-year to $29,312, an increase of approximately $8,300 per unit.
The tightest labor market in years is fueling rapid wage gains for most workers – the only problem is that red-hot inflation is quickly eroding those increases.
The Labor Department reported on Tuesday that average hourly earnings for all employees actually declined 2.7% in March from the same month a year ago when factoring in the impact of rising consumer prices. On a monthly basis, average hourly earnings tumbled by 0.8% in March, when factoring in the 1.2% inflation spike.
Sen. Joe Manchin said Tuesday government leaders need to stop "searching for where to lay the blame" as inflation reaches record highs, and instead cut spending and expand U.S. energy.
The scathing statement from Manchin, D-W.Va., comes after he was the loudest intra-party critic of the Biden administration's handling of the problem for months. But the president and the Federal Reserve haven't done enough to deal with inflation, Manchin said, as it reached a new 40-year high Tuesday with the consumer price index up 8.5% from March 2021 to last month.
Apple could boost its dividend by 10% and authorize a $90B share buyback plan, according to Citi.
YTD shares have fallen over 4% compared to the Nasdaq Composite's 12.6% drop.
The average price for a gallon of gasoline in the U.S. slipped on Tuesday to $4.098, according to the latest numbers from AAA.
The price on Monday was $4.114.
The previous record high was $4.33, set on Friday March 11, 2022.
U.S. stocks were choppy, moving between negative and positive territory early Tuesday as investors grew anxious over a new COVID-19 outbreak in China, the war in Ukraine and Federal Reserve plans to tighten monetary policy.
The S&P 500 fell 75.75 points, or 1.7%, to 4,412.53 Monday, while the Dow Jones Industrial Average retreated 413.04 points, or 1.2%, to 34308.08.
The tech-heavy Nasdaq Composite declined 299.04 points, or 2.2%, to 13411.96.
The Nasdaq's fall builds on last week's 3.9% retreat after Fed officials signaled their intent to raise borrowing costs and shrink the central bank's balance sheet to quell inflation.
Oil rose in early Asian trading Tuesday as doubts emerge about the prospects of a revived Iran nuclear deal in the near term.
Additional oil from Iran is looking less likely after Iran said the 2015 nuclear deal is alive but in the "emergency room," ANZ said in a market commentary.
The U.S. said the revival of the deal may not happen soon following new requests from Tehran, according to ANZ.
Front-month WTI crude oil futures are 1.1% higher at $95.34 per barrel. Front-month Brent crude oil futures are 0.9% higher at $99.37 per barrel.
Americans' inflation fears skyrocketed again in March, with concerns over rising prices hitting the highest level in more than a decade, according to a key Federal Reserve Bank of New York survey published Monday.
The median expectation is that the inflation rate will be up 6.6% one year from now, topping an 11-year-high recorded in February, according to the New York Federal Reserve's Survey of Consumer Expectations, which dates back to 2013. Three years from now, consumers see inflation hitting 3.7% – down slightly from 3.8% the previous month and well below the peak of 4.2% recorded in late 2020.
"Median inflation uncertainty — or the uncertainty expressed regarding future inflation outcomes — increased at the short-term horizon, reaching a new series high," the survey said. "At the medium-term horizon, median inflation uncertainty remained unchanged at a series high.
"With consumers raising their expectations for inflation over the next year, they believe that things like gasoline, food, medical care, rent and college tuition will get more expensive for them to buy.
The report is based on a rotating panel of 1,300 households.
Gold prices were steady in the early Asian session amid mixed developments.
The precious metal's upside seems challenged by factors including a stronger U.S. dollar and physical demand in Asia running behind expectations, said SPI Asset Management's managing partner Stephen Innes.
However, gold is holding above the $1,920 per ounce to $1,950 per ounce neutral territory and is trading constructively as Ukraine tragedies unfold, he said.
The U.S. economic outlook is darkening so rapidly that a recession may be on the horizon as the Federal Reserve makes an aggressive pivot to tame the hottest inflation in four decades, according to economists at Bank of America.
In an analyst note to clients, BofA chief investment strategist Michael Hartnett warned that surging consumer prices, combined with an increasingly hawkish central bank, could precipitate an economic downturn in the U.S.
'Inflation shock' worsening, 'rates shock' just beginning, 'recession shock' coming," Hartnett wrote.
The analysis comes as the Fed takes a more hawkish approach to fight inflation, which is at the highest level since 1982. Policymakers raised rates by a quarter-percentage point in March, and have since signaled support for a faster, half-percentage point increase at their May meeting.
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