US stocks traded mixed on Tuesday after a March inflation report turned out not to be as bad as some traders feared, but the impact of a halt to the Johnson & Johnson vaccine rollout kept optimism at bay.

The Dow Jones Industrial Average fell 160 points, or 0.5%, while the S&P 500 traded just above the flatline to hit a new intraday record high. The Nasdaq Composite, the relative outperformer, gained 0.75% while Apple, Amazon and Microsoft each gained more than 1%.

Store reopenings remained under pressure after the U.S. Food and Drug Administration announced it would recommend a hiatus in the Johnson & Johnson Covid-19 vaccine after reported cases of blood clotting.

According to the FDA, six cases of rare and severe blood clots were reported after receiving the J&J vaccine. More than 6.8 million doses of the J&J vaccine have been given in the United States

The government is calling for the vaccine to be suspended until the Centers for Disease Control and Prevention has completed their investigation into these cases. J&J shares fell 2%.

“Until this process is complete, we recommend taking this break,” said the FDA. “This is important to ensure that the healthcare provider community is aware of the potential of these adverse events and can plan based on the unique treatment that is required for this type of blood clot.”

Jeff Zients, the White House’s Covid-19 response coordinator, said Tuesday that the FDA’s announcement shouldn’t have a material impact on national vaccination efforts.

“This announcement will not have a material impact on our vaccination schedule: Johnson & Johnson’s vaccine accounts for less than 5 percent of the gunfire recorded to date in the US,” he said in a statement. “As a result of the President’s actions earlier this year, the United States secured enough doses of Pfizer and Moderna for 300 million Americans.”

Still, stocks will be hardest hit if the rapid adoption of vaccines in the US slows.

Carnival Corp shares retreated 3.2% and American Airlines lost 4.9%. Shares in Moderna, which makes another coronavirus vaccine, rose 7.7% after J&J News, first reported by the New York Times.

“I don’t think there will be a big reaction in the market beyond the current reaction,” said Mike Wilson, chief US equity strategist at Morgan Stanley, in CNBC’s “Squawk Box.” “We are optimistic, very optimistic that we will be fully reopened in the second half of this year.”

Trader on the New York Stock Exchange.

Source: NYSEa

The consumer price index, one of Wall Street’s most popular inflation indicators, rose 0.6% in March, up 2.6% year over year. Economists surveyed by Dow Jones forecast an increase in the leading index by 0.5% compared to the previous month and by 2.5% compared to the previous year.

The core CPI, which excludes volatile food and energy costs, rose 0.3% monthly and 1.6% year over year.

Government officials, including Federal Reserve chairman Jerome Powell on Sunday, and Biden administration economists on Monday, stressed that while the change can be expected to spike in inflation in the coming months, it is based on comparisons with last year’s pandemic lockdowns Annual and additional consumer spending could prove to be temporary, stimulus checks and pent-up demand.

Private sector strategists and economists also said the reading may not be a true measure of rising prices.

“We will soon see the effects of the 2020 Covid-19 pandemic on economic data. A particular focus will be inflation. Our message is simple: do not fall victim to this head fake,” Putnam Investments said in a note on Monday.

Fed officials said they were ready to let inflation run hot for a period of time without changing their accommodative policy stance, including buying assets and a benchmark interest rate close to zero.

The bond market was also subdued on Monday, with the 10-year government bond yield dropping to just over 1.66%. The returns move inversely to the prices.

The market was calm for the past week as Wall Street plunged into doldrums ahead of the first quarter earnings season. The company news is expected to gain momentum as the week progresses. JPMorgan Chase, Goldman Sachs, and Delta Air Lines are among the companies to release quarterly results.

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