Wall Street tumbled as the S&P 500 and the Nasdaq each fell more than 1% on Tuesday after hot inflation data showed producer prices increased more than expected in November and ahead of a potential decision on faster tapering from the U.S. Federal Reserve this week.
Declines were led by megacap technology stocks, with Meta Platforms, Microsoft Corp, Tesla Inc, Alphabet Inc, and Amazon.com Inc falling between 1.3% and 4.0%.
Apple Inc fell 1.6%, but stayed on track to become the world’s first $3 trillion company by market value.
Data from the Labor Department showed the producer price index (PPI) for final demand in the 12 months through November shot up 9.6%, clocking its largest gain since November 2010 and followed an 8.8% increase in October. read more
“The story for much of 2021, or certainly the last six months has been inflationary signs that have been more and more concerning,” said David Keller, chief market strategist at StockCharts.com.
Nine of the 11 major S&P 500 sector indexes fell, with financials gaining 0.5%, as investors expected a hawkish tone from the Fed at the end of its two-day meeting on Wednesday.
The U.S. central bank will likely signal a faster wind-down of asset purchases, and thus, a quicker start to interest rate hikes in order to contain the rapid rise in prices.
MacDailyNews Take: A healthy U.S. economy, consumer confidence, and consumer spending are essential to Apple, as America is Apple’s largest market, by far.
‘Tis best to get a handle on inflation, if you know how, while you still can. – MacDailyNews, May 11, 2021
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
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