US stocks drop after report shows April inflation surge
Wall Street stocks dip as US consumer inflation reached a three-year high of 3.8% in April, driven by gasoline prices amid the US-Iran conflict, influencing Federal Reserve rate decisions.
- US consumer inflation hitting a three-year high.
- The impact of the US-Iran conflict on gasoline prices.
- Federal Reserve's stance on interest rates.
NEW YORK: Wall Street stocks dipped early Tuesday as US consumer inflation hit a three-year high following a surge in gasoline prices due to the Iran war.
The consumer price index rose 3.8 percent year-on-year in April, up from March’s 3.3 percent figure.
The report comes as the two-and-a-half month US-Iran conflict churns on. Both sides have refused to make concessions and repeatedly threatened to resume fighting, but neither appears willing to return to all-out war.
About 15 minutes into trading, the Dow Jones Industrial Average was down 0.5 percent at 49,458.97.
The broad-based S&P 500 declined 0.4 percent to 7,384.74, while the tech-rich Nasdaq Composite Index dropped 0.5 percent to 26,135.22.
Both the S&P 500 and Nasdaq ended at records on Monday.
The inflation data means more Federal Reserve officials will support keeping interest rates flat, said Nationwide Chief Economist Kathy Bostjancic.
“This would increase the hurdle for the Fed to cut rates later this year, despite Kevin Warsh coming on to lead the (Fed) and being more inclined to argue for rate reductions,” Bostjancic said in a note.
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