A shaky week on Wall Street continued on Wednesday, when all three leading indices opened with a fall, before turning around a short time later. The result was a broad fall for the key indices.
This is what it looks like after closing time:
- The S&P 500 fell 1.6 percent
- Nasdaq fell 3.18 percent
- The Dow Jones fell one percent
The development on Wall Street came after still fiery inflation figures were presented before the start of trading. The report showed that inflation slowed less than expected, but is still at record highs.
Inflation for April was 8.3 per cent and is still at a record high, but it is slightly lower than the price increase of 8.5 per cent that was noted in March. The last time it was at this level was in the early 1980s.
One of the reasons for the stock market turmoil today is the record high inflation in the USA.
Analysts had previously expected inflation of 8.1 percent in April on an annual basis, according to a consensus collected by the news agency Bloomberg.
– Unemployment in the US is low, but inflation is far from the Fed’s target, therefore the key interest rate will be raised several notches in the coming months. It is important to emphasize that the stock markets are forward-looking in nature, ie they usually rise and fall ahead of major changes in the economy, writes Nordnet analyst Roger Berntsen in a morning comment, Wednesday.
Many are now asking the question of whether the inflation peak has been reached and many believe that it is about to flatten out, but that it may also take time before it begins to fall.
On Wednesday last week, the Fed, the US Federal Reserve, raised its key interest rate by 0.5 per cent. Several large interest rate hikes have been announced in the future. The long-term target for consumer price inflation in the United States is two percent.
In a speech to the White House on Tuesday, the President of the United States said that high inflation is his top priority domestically. He blamed the price increase on the pandemic and Russia’s invasion of Ukraine, according to The Guardian.(Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We would like you to share our cases using a link, which leads directly to our pages. Copying or other use of all or part of the content may only take place with written permission or as permitted by law. For further terms see here.