Futures tumble as US consumer price growth unexpectedly rises in August


U.S. stock index fell sharply on Tuesday after data showed a faster-than-expected rise in August consumer prices, cementing bets of a third straight 75-basis-point rate hike from the Federal Reserve next week.

The Labor Department’s consumer price index (CPI) report showed monthly CPI rose 0.1% in August from July, against expectation of a 0.1% contraction, while on a year-on-year basis it edged down to 8.3% from 8.5%.

Excluding the volatile food and energy components, core CPI likely increased to 6.3% from 5.9% in July, putting further pressure on the Fed to continue on its rate-hiking spree.

Policymakers last week emphasized their determination to keep raising rates until there is a sustained drop in inflation, which has been running at 40-year highs and above the Fed’s target of 2%.

Money now see a 79% chance of a 75-basis-point increase in rates and 21% chance of a whopping 100 bps hike by the Fed at its Sept. 20-21 meeting.

At 8:36 a.m. ET, Dow e-minis were down 332 points, or 1.03%, S&P 500 e-minis were down 59.75 points, or 1.45%, and Nasdaq 100 e-minis were down 265.5 points, or 2.08%.

The dollar, which has risen sharply this year in part due to expectations of aggressive rate hikes by the Fed, erased losses to turn positive.

Mega-cap technology stocks including Apple Inc and Microsoft Corp fell about 2% each, while Tesla Inc , Alphabet Inc, Amazon.com Inc and Meta Platforms Inc dropped between 2.5% and 3.2% as Treasury yields moved higher.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor


Source link

Comments are closed.