Market Updates
Hot Inflation Lifts Treasury Yields and Deepens Stock Sell-off
Barry Adams
13 Sep, 2022
New York City
Stocks plunged on Wall Street after the latest data showed how entrenched high prices have become in the broader economy.
Consumer prices in August rose at a slower pace of 8.3% in August following a rise of 8.5% in July, the Bureau of Labor Statistics said Tuesday.
Consumer prices in August rose 0.1% from July when prices were flat from the previous month.
Consumer prices rose at a slower pace annually in August but still remained elevated and significantly above the 2% target set by the Federal Reserve.
Benchmark indexes have been rallying for a week on the hopes of cooling inflation and discouraging the Fed from lifting rates by another large amount.
However, the latest elevated inflation report only strengthened the case for lifting key lending rates again by 75 basis points at the next Fed's meeting later this month.
The S&P 500 index dropped 3.1% to 3,984.09 and the Nasdaq Composite index plunged 4.1% to 11,722.61.
Crude oil declined 39 cents to $87.35 a barrel and natural gas rose 5 cents to $8.30.
The yield on 2-year Treasury notes rose to 3.74%, 10-year notes advanced to 3.43%, and 30-year bonds to 3.54%.
In Europe, market indexes also plunged following the sharp declines on Wall Street.
The DAX index plunged 1.4% to 13,211.26, the CAC-40 index declined 1.2% to 6,257.31, and the FTSE 100 index dropped 1.1% to 7,391.47.
The euro edged down to $1.0003 and the British pound traded down to $1.1519.
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