All 11 major sectors of the S&P 500 ended the session with losses, with communications services, consumer discretionary, technology and the semiconductor sector suffering the biggest declines.
The inflation of USA it fell again in August, for the second consecutive month, and placed its year-on-year rate at 8.3%, two tenths less than in July, according to data published this Tuesday by the Bureau of Labor Statistics (BLS).
However, compared to the previous month, consumer prices rose one tenth, after having remained stable in July, despite the 10.6% drop in gasoline prices.
“The Consumer Price Index (CPI) report was unequivocally negative for equity markets. A higher-than-expected report means we will receive continued policy pressure from the Fed through rate hikes,” assured the research director of the firm Janus Henderson Investors, Matt Peron, quoted by the CNBC channel.
Fed Chairman Jerome Powell repeatedly insisted on his commitment to continue raising interest rates, currently between 2.25% and 2.5%, for as long as it takes to bring down inflation. .
Investors are also waiting for reports on retail sales and industrial production on Thursday that will complete the snapshot of the economic situation before the next Fed meeting.
european bags
European stock markets fell 1.6% on the day, falling from two-week highs reached earlier in the session, as higher-than-expected US inflation data solidified bets for another big rate hike by the Federal Reserve.
The technology stocks, sensitive to interest rates, were the ones that weighed the most, with a drop of 3.2%, while the real estate sector lost 3.9%. The defensive utilities sector was the only winner among Europe’s major sub-sectors.
For your partthe pan-European STOXX 600 index snapped a three-session winning streakwhile the German DAX lost 1.6%, giving back gains that had taken it to near four-week highs on Tuesday.
In the past week, The European Central Bank made a surprisingly large rate hike of 75 basis points, in the clearest signal yet that it will not budge in its fight against inflation.
Tech stocks have lost almost 30% so far this year, among the steepest sectoral declines in Europe after real estate and retail names, as investors positioned for a high interest rate environment against a backdrop of rising post-pandemic inflation.
Source: Ambito
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