The disappointing data means traders are bracing for the Federal Reserve to ultimately raise rates even higher than expected to combat inflation.
NEW YORK — The Dow Jones Industrial Average sank more than 1,250 points Tuesday, its steepest sell-off in more than two years, after a government report showed that inflation is maintaining a surprisingly strong grip on the U.S. economy.
The hotter-than-expected reading has traders bracing for the Federal Reserve to ultimately raise interest rates even higher than expected to combat inflation, with all the risks for the economy that entails. Fears about higher rates sent prices dropping for everything from gold to cryptocurrencies to crude oil.
Most of Wall Street came into the day thinking the Fed would hike its key short-term rate by a hefty three-quarters of a percentage point at its meeting next week. But the hope was that inflation was in the midst of quickly falling back to more normal levels after peaking in June at 9.1%. Markets honed in on a 0.6% rise in such prices during August from July, double what economists expected, said Gargi Chaudhuri, head of investment strategy at iShares.
“The Fed can’t let inflation persist. You have to do whatever is necessary to stop prices from going up,” said Russell Evans, managing principal at Avitas Wealth Management. “This indicates the Fed still has a lot of work to do to bring inflation down.” Investments seen as the most expensive or the riskiest are the ones hardest hit by higher rates. Bitcoin tumbled 9.4%.
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Markets shudder on dashed inflation hopes; Dow falls 1,250The disappointing data means traders are bracing for the Federal Reserve to ultimately raise rates even higher than expected to combat inflation.
Read more »
Markets shudder on dashed inflation hopes; Dow falls 1,250 pointsThe stock market fell the most since June 2020 following Wall Street’s humbling realization that inflation is not slowing as much as hoped.
Read more »
Markets shudder on dashed inflation hopes; Dow down 1,000Markets are shuddering following Wall Street’s sudden realization that inflation isn’t slowing as much as hoped
Read more »
Markets shudder on dashed inflation hopes; Dow down 1,000NEW YORK (AP) — THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below. NEW YORK (AP) — Stocks are tumbling, and disappointment is smacking markets worldwide Tuesday, following Wall Street’s sudden realization that inflation isn’t slowing as much as hoped.
Read more »
Stock markets suffer biggest fall since June 2020 on dashed inflation hopesThe stock market fell the most since June 2020 as Wall Street recognizes that inflation is not slowing as much as hoped. The Dow lost more than 1,250 points and the S&P 500 sank 4.3%
Read more »