Stocks Sink After Inflation Accelerates In June

Barry Adams
13 Jul, 2022
New York City

Stocks sank after inflation accelerated to a new 4-decade high on the sustained jump in gasoline prices. 

The consumer price increase intensified to 9.1% annual rate in June from 8.6% in May after gasoline prices surged 60% from a year ago. 

The S&P 500 index dropped 1.0% to 3,781.62 and the Nasdaq Composite index declined 1.3% to 11,122.30. 

Futures of crude oil prices edged down a fraction $95.68 a barrel and natural gas gained 32 cents to $6.48 a unit. 

The yield on 10-year Treasury notes jumped to 3.01% after the release of the latest inflation report. 

Benchmark indexes opened lower on the worries that the latest inflation report will provide another reason for the Federal Reserve to lift interest rate by a large 75 basis points at its next meeting on July 26-27. 

Core inflation, which excludes volatile food and energy, rose 5.9% on an annual basis after rising at 6.0% in April. 

Delta Airlines declined 6.3% to $29.11 after the airline reported June quarter revenues rose 10% to $13.8 billion. 

Net income in the quarter fell 49% to $735 million or $1.15 a share from $1.44 billion or $2.21 a share a year ago.  

The airline said June quarter domestic revenues were 3% higher and international revenues were 81% of the period in 2019. 

 

European Markets Sank Deeper 

European markets declined further after the release of the inflation report. 

The DAX index declined 1.3% to 12,742.07, the CAC-40 index fell 1.1% to 5,977.07, and the FTSE 100 index decreased 0.8% to 7,152.80. 

Eurozone production increased 0.8% and 0.6% in the European Union in May on a monthly basis, the eurostat reported on Wednesday. 

On an annual basis, industrial production increased 1.6% in the euro area and 2.7% in the EU in May. 

The U.K. GDP increased 0.5% in May from the revised decline of 0.2% in April, the Office for National Statistics said on Wednesday. 

The expansion was broad based driven by increases in services, production, and construction. 

The monthly GDP is now estimated to be 1.7% above its pre-coronavirus pandemic levels in February 2020.

On an annual basis, the GDP rose 3.5% in May after rising at 3.7% in April. 

The euro inched lower to $1.003.