US stocks close lower on strong inflation data

4:05 pm: US equities fall on hot inflation report US stocks closed lower after a report showed inflation rising at its fastest pace in nearly 13 years.   The Labor Department reported that the consumer price index increased 5.4% in June from a year ago, as economists expected a 4.9% gain. On the day, the Dow dropped 0.31% to 34,888. The S&P 500 fell 0.35% to 4,369 and the tech-heavy Nasdaq declined by 0.38% to 14,677. 12.10pm: US stocks mixed at mid-session US benchmarks were mixed at lunch as investors mulled over the strong inflation data and what it  may mean for the Central Bank's response. The Dow Jones Industrial Average shed nearly 16 points at 34,980, while the S&P 500 added around six at 4,390. The tech-heavy Nasdaq index added around 65 points at 14,798. "While the Fed may well still be able to argue the continued rise in prices is transitory, given where the increases are occurring, if today’s number doesn’t mark the high-water mark, then Fed officials may start to shift a little bit more uncomfortably as we head into the autumn," said Michael Hewson, the chief market analyst at CMC Markets. "For now, markets are buying the transitory narrative, however if the current trend continues “transitory” it will be doing a lot more heavy-lifting than it is doing now." 9.42am: Proactive North America headlines: Logiq Inc (NEO:LGIQ) (OTCQX:LGIQ) says it will partner with Peer39 to offer brand safety solutions for ‘modern marketers’ American Resources Corporation (NASDAQ:AREC) bolsters its rare earth element electrolysis processing technology equipment First Cobalt Corp (CVE:FCC) (OTCQX:FTSSF) says recommisioning of battery metals plant near Toronto progressing as scheduled Mawson Gold Limited (TSE:MAW) (OTCPINK:MWSNF) (FRA:MXR) discovers high grade gold across broad widths at shallow depths at Raja prospect in Finland PsyBio Therapeutics Corp (CVE:PSYB) (OTCMKTS:PSYBF) (FRA:PSYB) grows intellectual property portfolio with filing of new patent application Real Luck Group Ltd (CVE:LUCK) (OTCQB:LUKEF) partners with Solitics to enhance player economics at Luckbox Binovi Technologies Corp (CVE:VISN) (OTCQB:BNVIF) (FRA:2EYA) appoints Tania Archer as interim CEO and board member Pure Gold Mining Inc (CVE:PGM) (LON:PUR) (OTCMKTS:LRTNF) reports 46% increase in gold output in 2Q from Red Lake mine as it advances towards 'commercial' production Mydecine Innovations Group (NEO:MYCO) (OTCMKTS:MYOCF) (FRA:0NFA) launching Mindleap 2.0, an online community for psychedelic education and support Victory Resources Corporation (CSE:VR) (OTCPINK:VRCFF) (FRA:VR61) initiates magnetometer survey for Lac Simard property in Quebec Golden Minerals Company (NYSEAMERICAN:AUMN) (TSE:AUMN) (FRA:7GB) mines 3,634 gold equivalent ounces in 2Q at its Rodeo mine in Mexico Victory Square Technologies Inc (CSE:VST) (OTCMKTS:VSQTF) (FRA:6F6) says portfolio company GameOn in partnership to launch first-of-its-kind NFT Predictor product Else Nutrition Holdings Inc (CVE:BABY) (OTCMKTS:BABYF) (FRA:0YL) inks marketing agreements with Tori Spelling, Kids With Food Allergies, and Plant-Based Network American Manganese Inc (CVE:AMY) (OTCMKTS:AMYZF) (FRA:2AM) says proud its battery recycling technology recognized by peer-reviewed journal Valeo Pharma Inc (CSE:VPH) (OTCQB:VPHIF) (FRA:VP2) says Redesca is now covered for public reimbursement across much of Canada Ximen Mining Corp (CVE:XIM) (FRA:1XMA) (OTCQB:XXMMF) says it is poised to assess gold resource potential of past producing Wilcox mine's tailings Falcon Gold Corp (CVE:FG) (OTCPINK:FGLDF) (FRA:3FA) acquires strategic land position in Hope Brook as exploration activity in Newfoundland shows no sign of slowing 9.39am: Wall Street starts lower Wall Street started Tuesday’s session in the red after US inflation data came in higher than analyst forecasts. Shortly after the opening bell, the Dow Jones Industrial Average was down 0.08% at 34,968 while the S&P 500 dropped 0.12% to 4,378 and the Nasdaq fell 0.03% to 14,728. Market sentiment took a hit after the latest US consumer price index (CPI) rose 5.4% in June compared to a year ago, above the 5% recorded in May and above the 4.9% rise expected by analysts. The jump in inflation is likely to spark fierce debate around the Federal Reserve’s previous argument that inflationary pressures on the economy will be temporary, with some fearing that relaxed monetary policy and low interest rates could cause runaway price increases. “The Fed will have to try harder to convince the markets that price pressures are still going to be transitory. It will be interesting to see how the Fed will react to this latest surge in inflation - will the dovish policymakers still stick to “transitory” script or change tack? But if the current trend for inflation continues then surely the FOMC will have to react and do so sooner. For now, though, the market is probably going to give the Fed the benefit of the doubt”, said Fawad Razaqzada at ThinkMarkets. 8:10am: Wall Street to make mixed start The main indices on Wall Street are set for a mixed start ahead of US inflation data today. Spread betting quotes point to the S&P 500 opening barely a point higher at 4,386 and the tech-heavy Nasdaq 100 starting 51 points to the good at 14,929 but the Dow Jones Industrial Average is seen drooping 25 points to 34,971. The Nasdaq is probably outperforming because of a report from Associated Press that the European Union has put on hold its plans to introduce a digital tax on tax-dodging multinational companies operating in the ethersphere. All eyes will be on the US consumer price index (CPI) due out later. “Analyst expectations are centred around 4.9% on the headline CPI, which would be a touch weaker than 5.0% from the previous month. In terms of core CPI, they expect a 4.0% reading – if correct, this would be up from 3.8% previously and the highest reading since 1991. On a month-on-month basis, CPI is seen rising 0.5% and 0.4% for the core print,” said Fawad Razaqzada at ThinkMarkets. “Expect the dollar and buck-denominated metals to move sharply on the back of today’s CPI data. If CPI is hotter than expected, it could revive taper talks again, sending the USD/JPY etc higher and potentially halting the Wall Street rally,” the analyst suggested. Already release is the NFIB headline index of small business activity and sentiment, which rose to 102.5 in June from 99.6 in May, beating the consensus forecast of 99.5. “The index was lifted by increases in most of the components, led by economic expectations, which jumped 14 points. This is the most volatile - by far - of the 10 equally-weighted headline components, and the June jump reverses the inexplicable plunge reported in May,” said Ian Shepherdson, the chief economist at Pantheon Macroeconomics. “Sales and earnings expectations also rose in June, along with inventory expectations, hiring plans and employee compensation. Note that the labour market numbers are not new today; they were released last week as part of the NFIB jobs report, as usual. Their message is clear; businesses can’t find all the people they want, and compensation costs are rising strongly,” he added. Four things to watch for on Tuesday: Aside from the major bank earnings today, other companies in the diary include industrial supplies group Fastenal Co (NASDAQ:FAST), Slim Jim and Chef Boyardee maker ConAgra Brands Inc (NYSE:CAG) and medical firm Healthcare Services Group Inc (NASDAQ:HCSG) Shares in Boeing Co (NYSE:BA) will be in focus after the firm cut production guidance for its 787 aircraft amid new structural defects with the plane Speaking of aircraft, carrier United Airlines Holdings Inc (NASDAQ:UAL) may also draw attention after it agreed to buy 100 19-seat ES-19 electric planes from Swedish firm Heart Aerospace On the macro front, aside from the US inflation data, traders may be interested in the monthly US budget statement