Wall St falls as hot consumer prices data fuels inflation worries

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(Businesshala) – Wall Street’s main indexes fell on Wednesday as a jump in US consumer prices last month deepened fears that high inflation is here to stay amid the supply chain.

FILE PHOTO: Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, October 20, 2021. Businesshala / Brendan McDermid

The Labor Department report also showed that the consumer price index rose 6.2% in the 12 months to October, the biggest year-on-year advance since November 1990.

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“Although the Federal Reserve believes inflation is transitory, evidence is starting to add up that this is not true,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

“The Fed has taken little steps outside of what they’ve told the markets they plan to do, but I think they should also be a little concerned with the strength of growth.”

The report comes a day after producer price data showed solid growth in October and highlighted the extent to which producers were passing on higher costs to consumers, whose spending accounts for 70% of the US economy.

The CBOE Market Volatility Index, a gauge of investor anxiety, rose in the session to its highest level nearly a month ago.

Tesla Inc. shares rose 2.9% after a volatile start to the day, lifting the S&P 500 consumer discretionary sector.

Investors also awaited the market debut of Amazon-backed electric-vehicle maker Rivian Automotive Inc., which was valued at $107 billion and could potentially become the next big player in a field dominated by Tesla.

Six of 11 major S&P 500 sectors fell in afternoon trading, with technology stocks falling 1% in mega-cap companies Apple Inc. and Microsoft Corp.

Wall Street’s main indices ended their long streak of record highs on Tuesday as investors booked profits recently.

“We’ve come out of an epic rally over the past two weeks, so it’s the nature of the market to get that type of momentum and pull back,” said Sylvia Jablonski, chief investment officer at Defense ETF in New York. ,

Wednesday’s losses came even as data showed Chinese factory gate prices hit a 26-year high in October, while economic advisers to the German government said they expected the current rise in inflation to well into 2022. Will continue

At 12:26 pm, the Dow Jones Industrial Average was down 62.51 points, or 0.17%, at 36,257.47, the S&P 500 was down 12.03 points, or 0.26%, at 4,673.22 and the Nasdaq Composite was down 96.61 points, or 0.61%. , at 15,789.93.

Another report from the Labor Department showed the state’s initial claims for unemployment benefits fell from 4,000 last week to a seasonally adjusted 267,000.

The number of issues declined to a 1.24-to-1 ratio on the NYSE and a 1.42-to-1 ratio on the Nasdaq. The S&P index recorded 25 new 52-week highs and three new lows, while the Nasdaq recorded 73 new highs and 64 new lows.

Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Additional reporting by Anisha Sarkar; Editing Aditya Soni

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