One hour after opening, the Dow Jones dropped 2.4% to 31,497.7 points, while the Nasdaq Composite fell more than 3% to 11,378.9 points.
Investors are still a little more alarmed by the evolution of inflationary pressures, which show no signs of easing, far from it, as shown by the latest statistics from the Labor Department.
After rising 0.3% in April, consumer prices jumped 1% in sequence in May, a much stronger increase than the 0.7% expected by economists.
On an annual basis, the US price index posted an increase of 8.6% at the end of May – a record since December 1981 and a level four times higher than the 2% target set by the Fed .
On the side of the economists of Liberum, it is judged that these figures become particularly ‘worrying’.
‘This surprise surge in headline inflation and the broadly rising nature of all components of its base version suggest that the Fed will continue to hike rates aggressively in the second half of the year’ , asks the London design office.
‘This makes the scenario of a recession in the United States almost inevitable,’ warns the London cabinet.
The difficulties of the American economy are already beginning to be reflected in certain indicators.
Released in the morning, the index of consumer confidence index of the University of Michigan has deteriorated to 50.2 in preliminary estimate in June, against 58.4 in May.
US government bond yields are rising in response to unprecedented strength in the latest inflation data.
The benchmark 10-year bond rate on the American market thus rose to almost 3.12%, a new high since the end of 2018.
The VIX index of volatility, for its part, stretched by almost 10% to almost 28.7 points, testifying to a marked resurgence of nervousness on the part of operators.
All 11 S&P sector indices are in the red, even those reputed to be favorably exposed to a rise in rates such as finance (-2.2%) or energy (-0.3%).
Contrary to the trend in the first exchanges, AMD finally turned down and now drops more than 3% the day after an investor day, however, hailed by analysts.
Still on the technology stocks front, Netflix slumped almost 5% after being downgraded to the sale by analysts at Goldman Sachs.
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