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.
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