PARIS, Sept 30 (Reuters) – The New York Stock Exchange fell slightly in early trading on Friday after news of an acceleration in an inflation gauge heightened fears of a sharp rise in US yields. Federal Reserve and by extension a recession in the economy.
The Dow Jones index lost 112.99 points, or 0.39%, to 29,112.62 points and the broader Standard & Poor’s 500 fell 0.24% to 3,631.59 points.
The Nasdaq Composite lost 0.09%, or 9.742 points, to 10,727.764.
The Commerce Department reported an acceleration in “core PCE” prices – the Federal Reserve’s preferred gauge of inflation – of 4.9% y/y and 0.6% m/m the other while the Reuters consensus gave them at +4.7% and +0.5% respectively.
The figures rekindle concerns over the Fed’s continued interest rate hikes, with futures pricing in the odds of a three-quarter point rate hike in November at 68% from 61% before the release of the data. ‘indicator.
“We need to see a sequential decline in inflation and that’s not the case yet (..) It’s not going to change the scenario of a ‘hawkish’ Fed, which has driven down stocks,” said Art Hogan, chief market strategist at B. Riley Wealth.
The Dow Jones is expected to post its worst monthly result (-7.9% for the moment) since March 2020, the start of the pandemic. The S&P 500 is down nearly 8.6% in September so far while the Nasdaq is down more than 9% over the month.
In stocks, Nike fell 13.04% after warning its gross margins would remain under pressure this year due to discounts needed to clear inventory and the rising dollar.