PARIS (Reuters) – The New York Stock Exchange took a nose dive at the opening on Tuesday after the announcement of an unexpected rise in consumer prices in the United States, which supports the scenario of a continuation at a sustained pace. the Federal Reserve’s interest rate hike.
A few minutes after the start of trading, the Dow Jones index lost 614.79 points, or 1.9%, to 31,766.55, the Standard & Poor’s 500 fell 2.31% to 4,015.43 and the Nasdaq Composite gave up 3.06% to 11,890.66.
The US consumer price index (CPI) rose 0.1% in August as the market expected it to fall by as much and rise year on year, to 8.3% after 8.5% , slowed less than expected.
Core inflation (“core CPI”), which excludes energy and food, also accelerated to 6.3% on an annual basis after 5.9% in July.
These figures could lead the Fed to decide next week on a further three-quarter point rate hike, as at its two previous meetings.
Money markets are now pricing in an 81% chance of a 75 basis point hike and 19% of an even bigger 100 point hike on September 21, according to the real-time barometer FedWatch.
On the bond market, the yield on two-year US Treasury bills jumped 16 basis points to 3.73%.
On the equity side, the prospect of a sharp rate hike particularly affects large caps in the high-tech sector such as Apple, Microsoft, Amazon or Tesla, which lost between 2.7% and 4.6%.
But the decline does not spare any of the major sectors of the rating: the S&P index of financial stocks fell by 2.18%, that of consumer discretionary by 3.34%, that of industry by 1.93%.
Within the Dow Jones, whose values are all in the red, the least marked drop is for Procter & Gamble, which gives up 0.42%.
(Written by Marc Angrand)
Copyright © 2022 Thomson Reuters