Wall Street ends sharply lower after inflation hit 30-year high
(AFP)
NEW YORK – US shares fell sharply on Wednesday after consumer inflation hit a 30-year high, and as investors headed for the exits after a streak of gains over the last few weeks.
While some analysts said a decline was to be expected, the inflation data loomed large. The US consumer price index (CPI) surged 6.2 percent in the 12 months ended in October, a 30-year high coming amid rising oil, auto and housing prices, according to the Labor Department data.
The benchmark Dow Jones Industrial Average dropped 0.7 percent to finish the day at 36,079.94, and the broad-based S&P 500 fell 0.8 percent to 4,646.71.
The tech-rich Nasdaq Composite Index sank 1.7 percent to end at 15,622.71.
The CPI spike added to concerns that supply bottlenecks, along with shortages of key components and workers will lead to persistent inflation, despite assurances from Federal Reserve Chair Jerome Powell that the pressures will fade.
Some economists think the central bank will have to be more aggressive to contain prices, pulling back more quickly on its bond buying program and potentially raising the key borrowing rate multiple times next year.
Maris Ogg of Tower Bridge Advisors noted that markets equities would have fallen further “if people were really worried about it.”
“But the higher inflation runs, the more people think Powell is going to accelerate the program. And the closer you are to an interest rate increase,” Ogg said.
Electric truck maker Rivian had its trading debut, ending the session 29 percent above its initial offering price at $100.73, making the company that has only just begun to get vehicles off the assembly more valuable than Ford and General Motors.
