U.S. stocks fell sharply on Tuesday, with the Dow plummeting 1,200 points, after a key August inflation report came in hotter than economists expected, hurting investor optimism for less aggressive Federal Reserve interest rate hikes.
The Dow Jones Industrial Average slid 1,276.37 points, or 3.94%, to close at 31,104.97. The S&P 500 dropped 4.32% to 3,932.69, and the Nasdaq Composite sank 5.16% to end the day at 11,633.57.
More than 490 stocks in the S&P 500 fell… The August consumer price index report showed a higher-than-expected reading for inflation… On a year-over-year basis, inflation was 8.3%.
The report is one of the last the Fed will see ahead of their Sept. 20-21 meeting, where the central bank is expected to deliver its third consecutive 0.75 percentage point interest rate hike to tamp down inflation. The unexpectedly high August report could lead the Fed to continue its aggressive hikes longer than some investors anticipated.
MacDailyNews Take: After drifting around aimlessly for far too long on the U.S.S. Transitory, the delusional Fed is laughably too little, too late.
Catching up will be difficult. But, hey, good luck on that soft landing. 🙄
Apple (AAPL) shares shed $9.59 (-5.87%) to close at $153.84 in regular trading on Tuesday.
In January, Interactive Brokers founder Thomas Peterffy said, “1% or 2% [in interest rate hikes] doesn’t mean anything. If they really wanted to stop inflation, they would have to raise rates to 4%, 5%, 6%.”
The Fed’s current target interest rate range is 2.25% to 2.50%.
‘Tis best to get a handle on inflation, if you know how, while you still can. – MacDailyNews, May 11, 2021
Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult. – MacDailyNews, May 11, 2022
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