US inflation falls in the Dow Jones index after exceeding expectations
Consumer prices in America rose more than expected in August, which put pressure on US stock markets, out of fear that the Federal Reserve would continue to impose its restrictive policies, after most expectations indicated that we were approaching the end of the current interest rate hike cycle.
By the end of Wednesday’s trading, the Dow Jones Industrial Average lost 70 points, representing 0.2% of its value at the beginning of the day, while major technology companies contributed to moving the S&P 500 and Nasdaq indices into the green zone, albeit by an increase of 0.12% and 0.29%, respectively. .
Rising energy costs led to US inflation exceeding expectations in August, which may complicate the Federal Reserve’s battle to keep prices under control, as consumer prices rose 3.7% year-on-year, according to US Bureau of Labor Statistics figures released on Wednesday.
On the other hand, the gains of technology companies rebounded on Wednesday, as shares of Tesla, the electric car manufacturer, rose by 1.4%, after billionaire investor Ron Barron stuck to his positive expectations for them, and shares of the retail giant “Amazon” recorded their highest level since. August 2022, up more than 2.5%.
In Europe, stocks ended trading on Wednesday with a decline, as shares of industrial companies led the decline, and BP shares fell after the sudden resignation of its CEO, after US inflation exceeded expectations, while investors await the European Central Bank’s decision regarding monetary policy tomorrow, Thursday.
The STOXX 600 index of European stocks fell by 0.3%, and industrial sector shares fell by 0.8%.
BP shares lost 2.8% after CEO Bernard Looney resigned yesterday, Tuesday, with immediate effect, after details of his previous personal relationships were revealed, which were not fully disclosed. But the company said he did not break the law.
Data showed that industrial production in the euro zone fell more than expected in July, highlighting downward revisions to economic growth this year by the European Commission.
What helped limit the losses was a 0.6% rise in European bank stocks, which usually benefit from rising interest rates, recording gains for the fourth session in a row.
Relatedly, oil prices fell on Wednesday, after previously recording the highest level in ten months, as data showed a sudden increase in US crude inventories, which overshadowed expectations of a scarcity of crude supplies for the rest of the year.
Brent crude futures fell 18 cents to settle at $91.88 per barrel. The highest price recorded during the session, at $92.84 per barrel, was the highest since November.
The price of US West Texas Intermediate crude fell 32 cents to $88.52 per barrel. Its highest price during the session, $89.64 per barrel, was also the highest since November.
Data showed a rise in inventories of crude, gasoline and distillates in the United States last week.
Crude inventories increased by four million barrels during the week to 420.6 million barrels, compared to analysts’ expectations in a Reuters poll for a decline of 1.9 million barrels.
The losses were limited by the decision of Saudi Arabia and Russia to extend production cuts of 1.3 million barrels per day until the end of the year. The International Energy Agency said on Wednesday that this will cause a large deficit in the market during the fourth quarter.
Analysts at Bank of America said that continued cuts could push the price of Brent crude to exceed $100 a barrel before the end of the year.
2023-09-13 22:49:24
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