Investors were willing to tolerate a higher than expected Producer Price Index reading, but not the double whammy of a higher-than-expected Consumer Price Index reading.
Premarket participants had it wrong as the index spent almost all of the premarket session in the green. At one point, ahead of the report, it was higher by roughly 20 handles. The immediate reaction to the report was negative and quickly dissolved the premarket gains.
The index was clinging to a modest gain late into the lunch hour and turned on a dime. The swift decline was instigated by the poor results of today’s bond auction, which hurt the 30 year bond futures as well as the iShares 20+ Treasury Bond ETF (NASDAQ: TLT).
Ahead of the final hour of trading, the bulls made a stand at 4355.50 and the index trimmed its losses heading into the close. The low for the session marked the reversal of a 20 handle-gain into a 50+ handle loss.
The end result was a decline of 29.25 handles at the closing price of 4380.50.
Among the top components of the index, Eli Lilly and Co (NYSE: LLY) was the biggest winner for the second day in a row. For the session, the issue added $5.22 or 0.86% at the closing price of $610.50, which marks a new all-time high.
That performance was over one percent better than the cash index’s decline of 0.62%.
Conversely, Tesla Inc. (NASDAQ: TSLA) was the biggest loser. The issue followed the index lower by declining $4.38 or 1.77% at the closing price of $258.87.