15 min ago
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Stocks slide on inflation data nerves, breather after 1Q performance …and taxes?
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After an initial pop to start the trading day, stocks are moving lower.
The Dow Jones Industrial Average is off 0.3% while the S&P 500 is down 0.3%. The Nasdaq Composite is off 0.1%.
Steve Sosnick, chief strategist at Interactive Brokers, has some theories for Tuesday's fizzle.
First, there could be nervousness ahead of the March inflation data that’s due out tomorrow, he said.
A hotter-than-hoped print from the Consumer Price Index will not sit well when investors are wondering when the Federal Reserve will cut its benchmark interest rate.
Second, Sosnick said it could be some natural consolidation after a spectacular first quarter performance for markets. “It’s quite reasonable to think the market will go sideways to slightly lower for some period of time,” he said, noting that’s been a recurring theme through April.
Third, don’t forget that Monday, April 15 is Tax Day. So it’s entirely plausible to think there’s some profit-taking to ensure 2023 tax bills are paid, Sosnick said.
“I don’t think it’s a coincidence when Nvidia is a leader to the downside,” he said. The chip maker was the “poster child” of the 2023 and early 2024 market gains, he said.
On Tuesday, its shares were down 2.7% around noon.
Others say the IRS is going to make its presence felt in the coming days. Money market funds could feel the strain as taxpayers tap their accounts to pay balance due bills, one Wall Street strategist previously said.
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