Inflation, interest-rate worries send stocks lower

Stocks fell Wednesday on Wall Street, giving back some of their recent gains as uncertainties about interest rates and inflation continue to reign.

Investors also reviewed another set of mixed earnings reports from big companies. The latest round of financial results and forecasts is expected to help give Wall Street a clearer picture of how inflation is shaping consumer spending and business plans.

The S& P 500 fell 46.14 points, or 1.1%, to 4,117.86 and is now on track for a weekly loss after a few days of choppy trading. The Dow Jones Industrial Average fell 207.68 points, or 0.6%, at 33,949.01. The Nasdaq composite fell 203.27 points, or 1.7%. to 11,910.52.

The pullbacks follow Tuesday’s gain of 1.3% for the benchmark S&P 500 after comments by Federal Reserve Chair Jerome Powell. Markets found some solace in Powell’s signaling that last Friday’s exceptionally strong jobs report wouldn’t alone push policymakers to become more aggressive on interest rates.

But analysts pointed out that Powell’s comments were just as tough on inflation as before. Powell said that while he has seen improvements in inflation, the road ahead is still long. The Fed can help drive down inflation by raising interest rates and keeping them high, but that also raises the risk of a deep recession and hurts investment prices.

Uncertainties about inflation and interest rates have been at the center of Wall Street’s big swings for the past year. So have shifting expectations for the economy to fall into a deep recession.

Companies have so far been reporting relatively lackluster earnings for the last three months of 2022, as rising costs eat profits.

Chipotle Mexican Grill Inc. fell 5% after reporting weaker profit and revenue for the latest quarter than Wall Street expected.

Jack Henry & Associates Inc., a company in the financial technology industry, sank 9.3% for one of the biggest drops in the S&P 500 after reporting weaker results than expected and trimming financial forecasts for the full fiscal year.

Lumen Technologies Inc. tumbled 20.8% despite reporting stronger results than expected. Its forecasts for some financial measures in 2023 fell short of analysts’ expectations.

On the winning side was CVS Health Corp., which gained 3.5% after topping Wall Street’s forecasts for revenue and profit. The company also said it would buy Oak Street Health, a primary care company, in a deal valued at about $10.6 billion.

Entertainment giant The Walt Disney Co. rose 1.8% in after-hours trading after reporting surprisingly good fiscal first-quarter financial results.

In the bond market, Treasury yields held relatively steady after zooming higher in recent days on expectations for a firmer Fed.

The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, slipped to 3.62% from 3.68% late Tuesday. The two-year yield, which moves more on expectations for the Fed, dipped to 4.43% from 4.47%.

Abroad, trading on Istanbul’s exchange was suspended after the market benchmark sank more than 7% as Turkey struggles with the aftermath of a magnitude 7.8 earthquake that has killed more than 9,500 people. It remained unclear Wednesday when trading would resume.