The U.S. stock selloff deepened Wednesday as investors digested a spike in U.S. inflation. Consumer prices for April rose 4.2% year over year, making for the biggest annual increase since September 2008. Prices rose 0.8% from the prior month. Both exceeded economists’ expectations. The report has investors weighing the possibility that the Federal Reserve may have to alter its asset purchase plan and course for interest rates.
The Dow Jones Industrial Average fell 421 points, or 1.23%, while the S&P 500 and the Nasdaq Composite were lower by 1.54% and 2.28%, respectively.
Mega-cap tech stocks including Apple Inc. [-2.46%] and Microsoft Corp. [-2.81%] remained in focus as investors continued to rotate out of growth stocks and into value plays.
Overseas markets were mostly higher.
Britain’s FTSE 100 was out in front in Europe, advancing 0.82%, while Germany’s DAX 30 and France’s CAC 40 ticked up 0.2% and 0.19%, respectively. China’s Shanghai Composite rose 0.61% and Hong Kong’s Hang Seng index gained 0.78%.
MacDailyNews Take: Again, it’s best to get a handle on inflation, if you know how, while you still can.
Inflation is repudiation. — Calvin Coolidge
When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan