STOCK MARKET NEWS: Stocks rebound on wholesale price report, Amtrak cancels long-distance routes

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Symbol Price To change %To change
Me: DJI $31,104.97 -1,276.37 -3.94
SP500 $3,932.69 -,177.72 -4.32
I: COMP $11,633.57 – 632.84 -5.16

U.S. stock index futures slid on Wednesday after a sharp sell-off on Wall Street in the previous session on rate hike jitters, as investors awaited more inflation data for clues on the pace. monetary policy tightening.

The three major U.S. stock indices posted their biggest one-day percentage decline since June 2020 on Tuesday after a surprisingly hot consumer price index report cemented bets that the Federal Reserve would make the third consecutive 75 basis point rate hike next week.

Markets are currently pricing a 37% chance of a massive 100 basis point hike by the central bank, a view echoed by analysts at Nomura, and expect rates to peak at 4.34% by March 2023.

All 30 stocks in the Dow Jones Industrial Average fell, as did all 11 sectors in the S&P 500. Only five stocks in the broad benchmark index ended the session in the green.

The Dow fell 1,276.37 points, or 3.9%, to 31,104.97. The S&P 500 fell 177.72 points, or 4.3%, to 3932.69. The Nasdaq Composite slipped 632.84 points, or 5.2%, to 11,633.57. All three indices posted their biggest one-day losses since June 11, 2020.

The declines left the Dow Jones industrials down 14% in 2022, while the S&P 500 lost 17% and the Nasdaq Composite fell 26%.

Investors were eagerly awaiting Tuesday’s release of the consumer price index, which provided a final major look at inflation before the central bank’s interest rate-setting committee meets next week. .

Expectations about the path of monetary policy have dominated markets as investors price higher rates into asset prices and try to predict how resilient the economy will be to rising rates.

Analysts had hoped officials would consider easing their pace of interest rate hikes if data continued to show inflation falling. The data undermined those hopes, appearing to settle the case for the Fed to raise rates by at least 0.75 percentage points next week.

After the report was released, stock futures fell, bond yields rose and the dollar rallied. Traders started pricing in the possibility of the central bank raising interest rates by a full percentage point next week.

Fed Chairman Jerome Powell said earlier this month that the central bank was firmly focused on curbing high inflation to prevent it from taking root as it did in the 1970s. .

With Tuesday’s declines, the S&P 500 is up 7.3% from its June low. While investors generally expect volatility to continue to rock the stock market, some suspect the economy remains strong enough to avoid a major decline from here.

Meanwhile, Asian stocks were down on Wednesday.

Hong Kong’s Hang Seng index lost 2.6% to 18,831.88 and the Shanghai Composite index fell 0.9% to 3,234.18. The benchmark Tokyo Nikkei 225 lost 2.2% to 27,991.82, while Sydney’s S&P/ASX 200 fell 2.4% to 6,839.50. In Seoul, the Kospi lost 1.5% to 2,414.26.

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