The Dow Jones Industrial Average dropped nearly 100 points on worries Producer Price Index (PPI) higher than expected It will be a factor in supporting the US Federal Reserve (Fed) interest rate hike and will lead the economy US in recession.
At 20:32 Thai time, the Dow Jones Industrial Average was 29,144.72, minus 94.47, or 0.32%.
The Labor Department said its PPI, a measure of inflation on producer spending, rose 0.4% in September from a month ago. It was 0.2% higher than analysts’ expectations, after falling 0.2% in August.
Year-over-year, the PPI rose 8.5% in September, higher than analysts’ forecast of 8.4% from 8.7% in August.
Investors are keeping an eye on the minutes of the September Fed meeting which will be released today. and tomorrow the numbers of the consumer price index (CPI). to find an indication of the direction of the Fed’s interest rates
The survey found that CPI continued to indicate high inflation in September. It jumped more than 8%, close to a 40-year high.
The market was also put under pressure by the strong dollar. and the rebound in US government bond yields
The strength of the dollar has raised investor fears that it will affect the profits of listed companies with overseas earnings. The rise in 10-year US Treasury bills, which are US government bonds used as a benchmark for global bond prices. This includes the US mortgage interest rate. it will cause consumers to have less money to spend while the cost of paying off their mortgage increases AND companies will face higher costs for paying off debt. forcing these companies to reduce their investments and reduce dividend payments to investors
Tobias Adrian, director of capital markets and monetary policy at the International Monetary Fund (IMF), warned that a shift in investor sentiment could lead to a 20% decline in US equity markets.
Adrian’s warning was consistent with comments made by JPMorgan CEO Chase Jamie Dimon, who warned: The US economy is likely to go into recession in the next 6-9 months and the S&P 500 will drop another 20% , depending on how the Federal Reserve manages a gradual slowdown. or collapsed severely
