Dow falls by almost 700 points after inflation report reduces chance of a jumbo-sized rate cut
CNN
Wednesday’s Consumer Price Index report was the last bit of hope for investors clamoring for a half-point rate cut from the Federal Reserve when it meets next week.
Wednesday’s Consumer Price Index report was the last bit of hope for investors clamoring for a half-point rate cut from the Federal Reserve when it meets next week. That hope has now all but faded, and stocks are getting slammed as a result. Hours after the August CPI report was released, which showed the annual pace of price increases cooled to 2.5%, the lowest level since February 2021, the Dow plunged by as much as 700 points, or 1.7%. The S&P 500 was down by 1.5% and the Nasdaq Composite moved 1% lower. CNN’s Fear and Greed Index, which measures seven barometers of market sentiment, moved further into “fear” territory. On a monthly basis, prices rose 0.2%, unchanged from July. But what appeared to garner a lot more attention was the 0.3% monthly rise of the core CPI gauge, which excludes food and energy. That exceeded economists expectations for a 0.2% rise. Fed officials pay close attention to core inflation readings because they can offer more clarity on where prices are headed longer term.
If voted into office in the November US presidential election, former President Donald Trump said he promises to impose sweeping tariffs of at least 10% on all foreign imports, up to 60% for some Chinese products, and levies as high as 100% for countries that abandon the dollar as their reserve currency.