In this Nov. 23, 2020 file photo, the New York Stock Exchange is seen in New York. Stocks are opening lower, Wednesday, May 12, 2021, on Wall Street and bond yields are rising as investors reacted to a worse-than-expected increase in inflation last month. (AP Photo/Seth Wenig)
Stocks were broadly lower again Wednesday as investors' concerns about inflation grew after government data showed signs of prices increasing across a number of goods.
The S&P 500 index was down 1.1% as of 10:47 a.m. Eastern. The Dow Jones Industrial Average was down 286 points, or 0.8%, to 33,984 and the technology-heavy Nasdaq was down 1.8%.
Investors reacted negatively to the Labor Department's report that showed consumer prices rose 0.8% in April, with inflation rising the fastest year-over-year since 2008. Investors have been worrying that inflation could return after being absent for many years as the economy revs out of the recession brought on by the pandemic. However Federal Reserve officials and other economists have said moderate inflation may be a good thing in a recovery.
Investors have worried about inflation since bond yields spiked earlier this year, though yields have mostly stabilized since then. The yield on the 10-year Treasury did bump up on the inflation report, rise to 1.67% from 1.62% the day before.
Rising inflation makes stocks seem more expensive, particularly high-value tech stocks that trade on the potential for their future profits in coming years. Apple, Microsoft, Facebook and Amazon were all down 1% or more.
Energy prices continued to climb following the shutdown of a major gas pipeline on the East Coast earlier in the week, and there are now reports of gasoline hoarding happening in places like North Carolina. Crude oil prices rose 1.9% and wholesale gasoline rose 1.8%.
Featured Article: Cost of Equity For A Business, Investors7 Stocks to Buy For the Gig Economy
Before the global pandemic, it was referred to as a side hustle—a way for some individuals to make a little extra money. However, as the pandemic has changed the nature of how we work, and as consumers how we spend, the gig economy has become an essential way of life for many workers.
There is much that’s not known about the long-term effects of the pandemic. But if there’s one lesson we learn from history, it’s that there will be ripple effects. We believe that society will get back to something resembling normal. However, what that normal looks like may be different.
Americans were becoming less social since before the pandemic. Now consumers have begun to realize there truly is no reason to leave their house to shop for anything. And while many crave physical connection during these times, there will be many that have changed their purchasing habits for good.
Other elements of the gig economy, such as ride-hailing and home rentals, were devastated due to the pandemic. Those businesses are likely to come back.
And that’s why companies that have created the gig economy aren’t going away anytime soon. In this special report, we’ll highlight several stocks that investors should consider as the gig economy moves forward.
View the "7 Stocks to Buy For the Gig Economy"