The S&P 500 and Nasdaq dipped on Thursday as a slew of economic data showing a post-COVID-19 “V-shaped” recovery accelerated fears of rising inflation.
The S&P 500 dipped on Thursday as a raft of upbeat data fanned fears of rising inflation, eclipsing reports that President Joe Biden has offered to scrap his proposed corporate tax hike.
Major stock indexes pared losses, with the Dow rising 0.1% after reports of the major concession by the Democratic president. Biden’s offer came amid talks with Republicans on an infrastructure package, a source familiar with the matter said.
“The tax structure now has gone from headwind to a tailwind,” said Rob Sechan, managing partner and co-founder of NewEdge Wealth.
A measure of service sector activity increased to a record high, pointing to a robust economic rebound. The strong data could force the Federal Reserve to pare back its crisis support sooner than expected, despite central bank officials’ reassurances to the contrary.
Apple Inc, Amazon.com Inc, Microsoft Corp and Alphabet were among the biggest drags on the benchmark S&P 500 as the high-growth stocks, whose future cash flows are discounted when interest rates are higher, fell.
MacDailyNews Take: Again, if you know how, it’s best to get a handle on inflation, while you still can.
Inflation is repudiation. — Calvin Coolidge
When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan