With the announcement of the American Labor Office on Tuesday morning, an increase CPI More than expectations, the expectations that the Fed will keep are growing uncompromising policies For long periods, assisted US stock indices Its worst days since June 2020, which coincided with the apex of the Covid-19 epidemic and its spread on American soil.
After the Labor Office announced that the Consumer Price Index increased during August by 8.3% from last year and expectations were below 8%, stock index futures contracts they decreased in pre-trade times, to complete his sad day with more losses, to lose during his trades Almost all of my gains in the last five days.
Despite the slight difference from expectations, equity and bond investors felt that the price data confirmed that there is still a long way to go to eliminate the highest inflation of the past four decades, which necessarily means that the Federal Reserve will continue to Raise interest ratesAnd keeping them at restrictive levels, for periods that exceed what previously expected by the markets.
At the end of today’s trading, the Nasdaq index, most affected by changes in interest rates, lost more than five percent of its value, on one of its worst days ever, due to the decline in share prices of many of the its companies, including a dead stock (formerly Facebook) and Nvidia, which have lost nearly ten percent of their value.
The Nasdaq index wasn’t the only one to lose, as the S&P 500 index, whose shares lost all but five of its companies, fell 4.32%, while the Dow Jones Industrial Average, whose thirty shares have decreased, it has lost only 3.94% of its value.
Matt Peron, director of research at the investment firm Janus Henderson Investors, said that the CPI data has been very bad for equity markets and that inflation has exceeded expectations, which means that “we will have to face the continuing pressure from the Fed rate hike “.
Perron stressed that the data released “are pushing away all the pivotal points that the markets wanted to stop the Fed’s restrictive policies”.
Investors’ eyes are eagerly awaiting the Federal Reserve meeting, scheduled for 21st this month, as expectations broadly point to a decision to raise interest rates on the bank’s funds by seventy-five basis points, if not more.
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