Shares on Wall Street fell on Thursday as markets bet the latest inflation report would force the Federal Reserve to step up its efforts to tighten monetary policy and raise lending rates.
Consumer prices in the world’s largest economy have risen at an unprecedented annual rate since February 1982, rising 7.5% in the 12 months to January, government figures show.
U.S. stocks opened decisively lower before recovering most of the midday losses after a mixed session in Europe and a bullish day for Asian stock markets.
But Wall Street headed south again after St. Louis Fed Chairman James Bullard told Bloomberg he would be open to a rate hike outside of regular meetings and that he would like to see them rise to 1% by July.
The remarks prompted investors to shift their bets towards a larger interest rate hike in March and helped push the yield on the 10-year US Treasury above 2%.
All three major indexes ended sharply lower, with the S&P 500 down 1.8%.
“Even though the market was already pricing in a series of rate hikes this year, the hawkish comment raised concerns that the Fed’s tightening plans could be more aggressive and sooner than expected due to lingering inflationary pressures.” , said Briefing.com.
In Europe, London’s FTSE 100 rose, Frankfurt’s DAX rose slightly and in Paris, the CAC 40 slipped.
The continent has had its share of negative news, with the European Commission slashing forecasts for eurozone economic growth, energy prices and supply chain issues driving up inflation.
Elsewhere, signs of progress on the diplomatic front in Eastern Europe have limited rising oil prices in recent days, as has the possibility of a revived Iran nuclear deal, which could see Tehran resume global oil exports and alleviate supply issues.
Among individual companies, Disney jumped 3.4% amid news that it added far more subscribers than expected to its Disney+ streaming service in the just-ended quarter while recording sales. profits better than expected.
But Uber fell 6.1% as the ride-hailing company’s medium-term earnings forecast disappointed investors despite posting strong fourth-quarter results.
– Key figures around 21:00 GMT –
New York – Dow: DOWN 1.5% to 35,241.59 (closing)
New York – S&P 500: 1.8% down to 4,504.08 (close)
New York – Nasdaq: DOWN 2.1% to 14,185.6 (closing)
London – FTSE 100: UP 0.4% to 7,672.40 (closing)
Frankfurt – DAX: UP less than 0.1% to 15,490.44 (closing)
Paris – CAC 40: DOWN 0.4% to 7,101.55 (closing)
EURO STOXX 50: DOWN 0.2% to 4,197.07 (closing)
Tokyo – Nikkei 225: 0.4% higher at 27,696.08 (close)
Hong Kong – Hang Seng Index: UP 0.4% to 24,924.35 (close)
Shanghai – Composite: UP 0.2% to 3,485.91 (close)
Euro/dollar: UP at $1.1434 vs. $1.1425 Wednesday night
Pound/dollar: UP to $1.3562 from $1.3535
Euro/pound: DOWN to 84.25 pence vs. 84.41 pence
Dollar/yen: UP to 115.99 yen from 115.52 yen
North Sea Brent: 0.2% down to $91.41 a barrel
West Texas Intermediate: UP 0.2% to $89.88 a barrel