Dow Falls 200 Points After Worse-Than-Feared Inflation Data And Johnson & Johnson Vaccine Concerns

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Stocks are mixed near record highs Tuesday as investors largely brush off firmer-than-anticipated inflation data and a potential blow to the nation’s inoculation efforts, focusing instead on the Wednesday start of first-quarter earnings season, which will shed light on how corporations have been faring as the economy reopens.

Key Facts

Shortly after the market open, the Dow Jones Industrial Average and the S&P 500—both of which were virtually flat Monday after closing out last week at record highs—fell 181 points, or 0.5%, and 0.1%, respectively, while the tech-heavy Nasdaq jumped 0.4%.

Shares of Johnson & Johnson are slumping more than 2% after officials at the Food and Drug Administration (FDA) and Centers for Disease Control and Prevention (CDC) called for a pause on the administration of its Covid-19 vaccine over rare blood clot cases; shares of Moderna and Pfizer climbed 6% and 2%, respectively, after the announcement.

With still no word from the CDC as to when ships can set sail from U.S. ports again, shares of the world’s largest cruise operators continue to head up the S&P’s losses this week, with Norwegian Cruise Line and Carnival Corp. shedding 3% and 2.6%, respectively.

As inflation concerns mount on Wall Street, consumer prices rose a higher-than-expected 2.6% in March, with gasoline prices spiking 9.1% and accounting for almost half of the index’s price increase, according to Tuesday data from the U.S. Bureau of Labor Statistics.

Meanwhile, meme stocks GameStop and AMC, which plunged 11% and 8.5%, respectively, on Monday, are failing to add back losses Tuesday morning, climbing less than 1% apiece as Morgan Stanley warns that the market’s speculative pockets could see increased volatility in the months to come.

Global stocks were also mixed Tuesday morning, with the United Kingdom’s FTSE 100 falling 0.1% and Germany’s DAX Index ticking up 0.2%, while Japans’ Nikkei 225 ended the day up 0.7%.

Crucial Quote

“The Johnson & Johnson vaccine news, though an obvious negative, is unlikely to permanently disrupt the present market narrative as the scarcity of blood clot incidents coupled with alternative suppliers will keep the country on track to achieve herd immunity,” Vital Knowledge Media Founder Adam Crisafulli wrote in a Tuesday morning note. He says investors are also likely to look through the price data given that experts have been expecting higher inflation due to what’s known as base effects. In other words, monthly price data will now be based on the unusually low prices at the onset of the pandemic, so inflation will grow more quickly than usual as prices revert back to pre-pandemic levels.

Surprising Fact

Bitcoin nabbed a new price high of about $63,300 at about 8:15 a.m. Eastern Tuesday, pushing the market capitalization of the world’s largest digital currency to about $1.2 trillion, surpassing the value of Brazil’s entire stock market. The new high comes one day before Coinbase, the nation’s largest cryptocurrency exchange, is set to debut on the Nasdaq exchange. 

What To Watch For

JPMorgan, Wells Fargo and Goldman Sachs are all set to report earnings Wednesday before the market opens. Citigroup, Bank of America, PepsiCo and Delta Air Lines are slated to report Thursday.

Further Reading

US Calls For Halting Johnson & Johnson Covid-19 Vaccine After Rare Blood Clot Cases (Forbes)

Here’s Why The White House Isn’t Worried About Inflation (Forbes)

AMC Stock Plummets After Chinese Billionaire’s Firm Sells $220 Million Stake (Forbes)

Here’s The ‘Early Warning Sign’ Morgan Stanley Worries About As Stocks Hit Record Highs (Forbes)