NEW YORK: The Dow fell 1% on Friday after Federal Reserve official James Bullard said inflation was stronger than anticipated and it would take the central bank several meetings to figure out how to pare back stimulus.
The blue-chip Dow and the benchmark S&P 500 were set for their worst day in a month after Bullard, president of the St. Louis Federal Reserve, said he was among the seven officials who saw rate increases beginning next year to contain inflation.
The CBOE volatility index, Wall Street's fear gauge, spiked to 20.60 points, its highest level since May 21 following his comments.
"It may indicate that inflation is becoming a concern for the Fed," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
Wall Street's main indexes were jolted earlier this week after the Fed unexpectedly signaled it could begin tapering its massive stimulus sooner than expected, setting the benchmark S&P 500 on course to snap a three-week winning streak. Rate-sensitive bank stocks shed 1.8% as US yield curve flattened.
At 11:47 a.m. ET, the Dow Jones Industrial Average was down 386.62 points, or 1.14%, at 33,436.83, the S&P 500 was down 39.84 points, or 0.94%, at 4,182.02. The Nasdaq Composite was down 111.22 points, or 0.79%, at 14,050.13.
Comments
Comments are closed for this article.