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The Market Wrap for May 14: Inflation Bites Hard

One of the prevailing market forces over the last month or so has been the return of inflation. After years of little to no inflation, recent moves by the federal government to keep the economy going after the pandemic have spurred inflation in a big way. This week, the latest inflation figures continue to spook investors. Over the recent week, investors continued to sell tech stocks and other high-growth names as they try to balance the growing economy and the pressures of higher prices.

This spilled over into the earnings front as well. While the season is mostly over, many firms have started to warn about higher prices and input costs to their bottom lines. This continued to play into investors’ concerns about rising inflation figures.

Meanwhile, overall data this week painted a mixed picture. Consumers appear to be stepping back, while other measures of job health have stalled.

Perhaps the only positive this week was on the COVID-19 front. New recommendations from top health officials now include optional mask wearing for fully vaccinated adults and children.

All in all, the week’s trading was a volatile one, with stocks swinging wildly through the trading sessions.

Be sure to check out our previous Wrap here, when the markets started the month on a high note.

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