NEW YORK: Wall Street stocks sank early Thursday as another disappointing consumer inflation report set the stage for more aggressive Federal Reserve interest rates hikes.
Losses on the Nasdaq hit three percent soon after the market opened, while both the Dow and S&P 500 were down around two percent, touching two-year lows as the data showed prices rising twice as fast as expected in September.
US prices rose 0.4 percent in September compared to August, with price increases for food, shelter and medical care weighing on consumers, according to data from the Bureau of Labor Statistics.
Analysts said the report adds more certainty to expectations that the Fed will extend its policy of super-sized interest rate hikes at its next meeting in November.
US stocks edge up after inflation data, PepsiCo results
“The key takeaway from the report is the recognition that core inflation has gotten worse, driven by widespread pricing pressures,” said Briefing.com analyst Patrick O’Hare.
“This understanding will cement expectations for a 75-basis point rate hike at the next FOMC meeting and stir worries that the Fed will stay on an aggressive rate-hike path longer than hoped,” he added.
About 25 minutes into trading, the Dow Jones Industrial Average was down 0.9 percent at 28,950.61, well above session lows.
The broad-based S&P 500 fell 1.3 percent to 3,528.93, while the tech-rich Nasdaq Composite Index shed 2.1 percent to 10,202.61.
Among individual companies, Delta Air Lines gained 2.2 percent despite reporting lower-than-expected profits as it offered a bullish outlook for the upcoming holiday travel season.
Comments
Comments are closed.