U.S. stocks finished Wednesday’s session near their lows as the market continued to struggle to break out from a tight range.
The Dow Jones Industrial Average fell 152.68 points, or 0.4%, to 34,447.14 for its third negative day in a row. The S&P 500 dipped 0.2% to 4,219.55, below its intraday high of 4,238.04 reached on May 7 and its closing record of 4,232.60. The Nasdaq Composite also fell 0.1% to 13,911.75.
Industrials and financials were the two biggest losers among the 11 S&P 500 sectors, dragging down the broader market.
Meme stock mania continued Wednesday with day traders focusing their attention on Clean Energy Fuels this time, pushing the stock up more than 31%. Clover Heath, which surged over 85% in the prior session, pulled back 23% Wednesday.
Still, many on Wall Street believe the latest meme stock episode should stay contained to a handful of names, unlike the GameStop trading frenzy in January that had an impact on the broader stock market.
“Given the low risk of a broad contagion, we view the fallout of the recent short squeeze to be
limited,” Maneesh Deshpande, global head of equity derivatives strategy at Barclays, said in a note. “The current short squeeze is more localized probably because the number of stocks with high short interest has come down dramatically.”
Investors await the next reading on inflation to gauge if higher price pressures are just temporary as the economy continues to rebound from the pandemic-induced recession.
“US stocks have largely been stuck in a range since mid-April and don’t seem likely to be breaking out anytime soon,” Edward Moya, senior market analyst at Oanda, said in a note. “Investors want to see how hot pricing pressures get and how much downside in equities will occur once the Fed’s taper tantrum begins.”
The consumer price index for May is set to be released Thursday. Economists are expecting the CPI to rise 4.7% from a year earlier, according to Dow Jones. In April, the CPI increased 4.2% on an annual basis, the fastest rise since 2008.
On the data front, job openings in April soared to a new record high, with 9.3 million vacancies coming online amid the economic recovery.
— CNBC’s Tom Franck contributed to this story.
