Stocks tumble on the heels of hot August inflation report

US stock index futures fell sharply on Tuesday after data showed a faster-than-expected rise in consumer prices in August, confirming bets of a third straight 75 basis point rate hike by the Federal Reserve next week.

The Labor Department’s Consumer Price Index (CPI) showed the monthly CPI rose 0.1% in August from July, bucking expectations for a 0.1% decline, while rising to 8.3% from 8.5% year-on-year. has sunk.

Excluding the volatile food and energy components, the core CPI is likely to have risen to 6.3% from 5.9% in July, putting further pressure on the Fed to continue its rate hike frenzy.

Policymakers last week underscored their determination to keep raising rates pending a sustained fall in inflation, which is at a 40-year high and above the Fed’s 2% target.

Money markets now see a 79% chance of a 75 basis point rate hike and a 21% chance of a whopping 100 basis point hike by the Fed at its September 20-21 meeting.

At 8:36 a.m. ET, the Dow e-minis are down 332 points, or 1.03%, the S&P 500 e-minis are down 59.75 points, or 1.45%, and the Nasdaq 100 e-minis are down 265.5 points, or 2.08%.

The dollar, which has risen sharply this year in part on expectations of aggressive rate hikes by the Fed, pared losses and turned positive again.

Mega-cap tech stocks, including Apple Inc and Microsoft Corp, each fell about 2%, while Tesla Inc, Alphabet Inc, Amazon.com Inc and Meta Platforms Inc fell between 2.5% and 3.2% as yields for government bonds rose.

https://www.ibtimes.com.au/stocks-tumble-heels-hot-august-inflation-report-1838295?utm_source=Public&utm_medium=Feed&utm_campaign=Distribution Stocks tumble on the heels of hot August inflation report

Fry Electronics Team

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