Major U.S. stock indexes ended the day with huge losses as investors reacted to inflation data that cast doubt on expectations for near-term interest rate cuts from the U.S. Federal Reserve.
Dow Jones Industrial Average Dropped It fell more than 500 points to 1.35% on Tuesday, while the S&P 500 and Nasdaq fell 1.37% and 1.80%, respectively. The sharp decline came after the Bureau of Labor Statistics released a disappointing Consumer Price Index report Tuesday morning that showed inflation had slowed to just 3.1% instead of the expected 2.9%. be. (Related: Here’s how Super Bowl parties have become more expensive under the Biden administration)
The better-than-expected inflation report has cast a shadow on investors’ expectations for a cut in the federal funds rate, leading to easing credit conditions and lowering interest rates across the economy. The Federal Reserve has set the federal funds rate in the range of 5.25% to 5.50%, the highest level in 23 years, in an effort to combat high inflation.
BREAKING: The Dow Jones Industrial Average is now down 600 points on the day as inflation was higher than expected.
The S&P 500 fell nearly 90 points, wiping out up to $700 billion in value today.
Meanwhile, the market removed two rate cuts from policy. pic.twitter.com/AAk0jRIDgo
— Kobeissi Letter (@KobeissiLetter) February 13, 2024
The Dow Jones’ decline resulted in its worst day since March 2023. according to Go to NBC News. The two-year bond yield rose to over 4.63%, and the 10-year bond yield rose to over 4.29%.
Inflation has consistently exceeded the Fed’s 2% target since peaking at 9.1% in June 2022 under President Joe Biden. After the spike in June 2022, the lowest year-on-year inflation rate the US has reported is just 3.0%. , occurred in June 2023.
In December, the Federal Reserve said it expected to cut the federal funds rate to 4.6% by the end of 2024, indicating the possibility of three rate cuts. Markets are watching Fed officials like Fed Chairman Jerome Powell for clues about future rate cuts, and in early February, Powell’s remarks during an interview on “60 Minutes” were cut short. , the Dow Jones Industrial Average fell rapidly as well. Voice over.
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