Stocks Fall on Hotter-Than-Expected Inflation Data - WSJ
Category: News & PoliticsVia: vic-eldred • 2 weeks ago • 16 comments
By: Karen Langley and Caitlin Ostroff (WSJ)
Stocks suffered their worst day in more than two years after hotter-than-expected inflation data dashed investors' hopes that cooling price pressures would prompt the Federal Reserve to moderate its campaign of interest-rate increases.
Investors sold everything from stocks and bonds to oil and gold. All 30 stocks in the blue-chip average declined, as did all 11 sectors in the S&P 500. Only four stocks in the broad benchmark were in the green in recent trading. Facebook parent Meta Platforms dropped 9.4%, BlackRock declined 7.5% and Boeing fell 7.2%.
The Dow industrials fell 3.9%, or nearly 1300 points, and the S&P 500 declined 4.3%, while the Nasdaq Composite slid 5.2% as rate-sensitive technology stocks took a heavy beating. All three indexes posted their steepest one-day losses since June 11, 2020.
Investors had eagerly anticipated Tuesday’s release of the consumer-price index, which provided a last major look at inflation before the central bank’s interest-rate-setting committee meets next week. Expectations for the path of monetary policy have held sway over the markets as investors factor higher rates into asset prices and try to project how well the economy will hold up as rates rise.
“It increases the probability of recession if the Fed has to move more significantly to address inflation,” said Chris Shipley, chief investment strategist for North America at Northern Trust Asset Management.