JNJ Johnson and Johnson

By Anna Hirtenstein 

U.S. stocks wobbled Tuesday as investors tried to gauge the impact of a halt in rolling out Johnson & Johnson vaccines and an uptick in inflation.

The S&P 500 opened less than 0.1% higher after futures on the index wavered between gains and losses. The broad market index on Monday was hovering near its recent record closing high. The technology-heavy Nasdaq-Composite Index climbed 0.4%, while the Dow Jones Industrial Average fell 0.2%.

Health authorities recommended a pause in using the Johnson & Johnson vaccine following reports of blood clotting. The Food and Drug Administration and the Centers for Disease Control and Prevention are reviewing data involving six reported cases of clotting.

"It means the pace at which you reach herd immunity is decreased, and it will take longer for the reopening of the economy," said Sebastien Galy, a macro strategist at Nordea Asset Management.

Fresh data also showed that U.S. consumer prices picked up sharply in March as the economic recovery gained momentum, partly reflecting higher gasoline prices. The Labor Department reported that the consumer-price index jumped 2.6% in the year ended March.

Investors in both stocks and bonds are seeking to assess whether the projected U.S. economic recovery will trigger a sharp rise in inflation that may remain for a protracted period. Policy makers have repeatedly said they expect any increase over the next few months will prove to be fleeting. An uptick in inflation expectations earlier this year led to a rise in bond yields, and damped appetite for richly valued technology stocks last month.

"The equity market is a bit stretched in valuation," Ludovic Subran, chief economist at Allianz, said before the inflation data was released. "If yields are going a bit higher on the back of stronger inflation, a lot of institutional investors could rotate their portfolios out of very risky equities to less risky bonds and still get quite a comfortable margin."

In bond markets, the yield on the 10-year Treasury note ticked down to 1.666%, from 1.674% on Monday. Yields rise when bond prices fall. The 10-year yield shot up as high as 1.749% at the end of March, from 0.915% near the start of the year.

Monica Defend, global head of research at asset manager Amundi, said she expects more volatility in the bond market this year.

"This is what we worry about the most," Ms. Defend said. "Inflation expectations will play a role at the same time as growth will be tested, in terms of the robustness of the recovery."

Higher bond yields could weigh on equity markets by creating a more attractive alternative to stocks, she said. But stocks will probably continue to climb as long as the economy grows, even if inflation moves higher, she added.

Brent crude, the international gauge for oil, climbed 1% to $63.92 a barrel. A brightening outlook and stimulus packages will boost economic activity and oil demand this year, the Organization of the Petroleum Exporting Countries said Tuesday.

Overseas, the pan-continental Stoxx Europe 600 was relatively flat.

In Asia, most major benchmarks rose by the close of trading. Japan's Nikkei 225 Index added 0.7% and Hong Kong's Hang Seng Index advanced 0.2%.

The Shanghai Composite Index retreated 0.5% after data showed that Chinese exports in March had risen less than economists had expected, resulting in a smaller trade surplus than anticipated.

Bitcoin rose over 4% to a record, trading above $63,000 apiece, according to data from CoinDesk. Coinbase, the largest U.S. cryptocurrency exchange, is planning to go public on Wednesday.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

(END) Dow Jones Newswires

April 13, 2021 09:46 ET (13:46 GMT)

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