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• The Nasdaq Composite fell more than 1%, to reach 15,247
• Wall Street's main indices recorded their first back-to-back losses in December
The S&P 500 and the Nasdaq fell more than 1% as investors reacted to a more-than-expected increase in producer prices in November and turned their attention towards a potential decision on quicker bond tapering from the U.S. Federal Reserve this week.
The tech-heavy Nasdaq Composite declined dropped 162 points, or 1.1%, to about 15,247, but had been as low as 15,097.35 on the day, recording the highest percentage decline among the major indices. The S&P 500 fell by 31 points, or 0.7%, to reach around 4,637. The Dow was down by 70 points, or 0.2%, reaching 35,580.
On Tuesday, Wall Street's main indices recorded their first back-to-back losses in December.
The Labor Department reported that the producer price index for final demand climbed 0.8% last month. Final demand prices moved up 0.6% in each of the 3 prior months.
The PPI increased 9.6% year on year through November, the largest year-on-year increase since November 2010.
Tuesday’s PPI report stresses the need to keep a track of inflationary pressures. Data released on Friday revealed that the consumer price index (CPI) had jumped to 6.8% year on year in November.
Federal Reserve officials continue to attribute the inflation jump to strong consumer demand for goods, supply chain bottlenecks, and the semiconductor shortage. Despite that, the inflation burst has been stronger than what was anticipated.
The yield on the 10-year Treasury note in the bond markets rose 1.4 basis points to 1.437% on Tuesday, boosting financial shares, while bringing down technology and other growth-oriented sectors.
The shares of Tesla fell by 0.1% after CEO Elon Musk sold more shares. Microsoft fell more than 3%, while Adobe dropped 6.6%.
Inputs from Reuters