Inflation in the United States is slowing less than expected. Wall Street pulls back.
On the day it was known that the year-on-year inflation rate in the US slowed to 8.3% in August, Wall Street opened in the “red.” The S&P 500 and Nasdaq both lost more than 2%.
The US year-on-year inflation rate slowed to 8.3% in August, down 0.2 percentage points from July, the US Labor Department said on Tuesday.
It is the second consecutive month of retrenchment after touching 40-year highs in June when it reached 9.1%, but the reading falls well short of the relief that was expected by investors.
The news is pressuring the major Wall Street indices at the opening of the session. The S&P 500 depreciates 2.12% to 4,023.11 points, while the Dow Jones industrials retreat 1.65% to 31,847.05 points. At the same time, the Nasdaq tech index loses 2.88% to 11,913.55 points.
This deceleration in prices is explained by the retreat in gas prices. However, food and rent prices continued to rise significantly, according to Reuters.
Moreover, with regard to the quarter-on-quarter change, the Consumer Price Index (CPI) in the US increased by 0.1% compared to July. Analysts consulted by Reuters had anticipated a 0.1% decrease.
As for the underlying inflation rate, which excludes energy and food prices, it rose to 6.3% in August, up from 5.9% in the previous month.
These data leave clues about the pace of the Fed’s interest rate hike at its next meeting, which is scheduled for September 20 and 21. Last week, the central bank president reiterated that he is “strongly committed” to controlling inflation.
Listed companies linked to the technology sector are among the most penalized, following the rise in US public debt yields. Amazon retreated 4.55% to 130.25 dollars; Tesla lost 3.15% to 294.84 dollars; and Alphabet, Google’s owner, fell 3.42% to 107.07 dollars.