Wall Street dips as hot consumer price data fuels inflation fears

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, October 20, 2021. REUTERS/Brendan McDermid

  • US consumer prices post biggest year-over-year rise since 1990
  • Biggest Technology Impact Among S&P 500 Segments
  • Indices down: Dow 0.17%, Standard & Poor’s 0.26%, Nasdaq 0.61%

(Reuters) – Wall Street’s main indexes fell on Wednesday as a surge in US consumer prices last month deepened fears of persistent high inflation amid supply chain crises.

The Labor Department report also showed that in the 12 months through October, the Consumer Price Index rose 6.2%, the largest annual advance since November 1990. Read more

“Although the Fed believes inflation is temporary, evidence is beginning to prove that this is not true,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

“The Fed has made quite a few moves outside of what it said to the markets they plan to do, but I think even they should be a little concerned about the strength of the increase.”

The report comes a day after producer price data showed a strong rise in October and highlights the extent to which manufacturers pass higher costs on to consumers, whose spending accounts for 70% of the US economy. Read more

Consumer Price Index in the United States

CBOE Market Volatility Index (.VIX)A measure of investor anxiety, it climbed to its highest level in nearly a month earlier in the session.

Tesla Corporation (TSLA.O) Shares are up 2.9% after a shaky start to the day, lifting the S&P 500 index of consumer appreciation (.SPLRCD).

Investors also waited for the market debut of Amazon-backed Rivian Automotive Inc. (Rivno), which was set to be worth $107 billion and could become the next big player in a sector dominated by Tesla. Read more

Six of the 11 major sectors of the Standard & Poor’s 500 Index fell in early afternoon trade, with technology shares (.SPLRCT) Retreated due to a 1% decline in large-cap companies Apple Inc (AAPL.O) and Microsoft Corporation (MSFT.O).

Wall Street’s major indexes ended a long streak of record closing highs on Tuesday as investors took profits from the recent rally in gains.

“We have just come out of an epic recovery the past two weeks, so the nature of the market is to have that kind of momentum and pullback,” said Silvia Jablonsky, chief investment officer at Defiance ETFs in New York. .

Wednesday’s losses also came after data showed Chinese factory gate prices hit a 26-year high in October, while the German government’s economic advisers said they expect the current rise in inflation to continue into 2022. Read more

At 12:26 p.m. ET, the Dow Jones Industrial Average (.DJI) It was down 62.51 points, or 0.17%, to 36,257.47 points, and the S&P 500 (.SPX) The index fell 12.03 points, or 0.26%, to 4,673.22 points, and the Nasdaq Composite (nineteenth) It was down 96.61 points, or 0.61%, to 15789.93 points.

Another report from the Labor Department showed that initial claims for state unemployment benefits fell by 4,000 to a seasonally adjusted 267,000 last week.

Declining issues outnumbered advanced stocks by 1.24 to 1 on the New York Stock Exchange and 1.42 to 1 on the Nasdaq.

The S&P recorded 25 new highs in 52 weeks and three new lows, while the Nasdaq recorded 73 new highs and 64 new lows.

Additional reporting by Shriyashi Sanyal and Devik Jain in Bengaluru; Additional reporting by Anisha Sircar. Edited by Aditya Sony

Our criteria: Thomson Reuters Trust Principles.

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