The will it or won’t it question on inflation was confirmed this morning, as predicted in my regular Monday updates, with US CPI reaching 4.2% for the 12 months to the end of April.
The result was far higher than the 3.6% predicted, sending markets in a sharp sell-off with the Dow Jones down 600 points at one stage.
Ultimately, the losses weren’t as significant with the Dow closing 2.0% lower, the S&P 500 down 2.1% and the Nasdaq 2.7%.
It is an interesting event as the Federal Reserve has been predicting a short-term inflation spike for some time, confirming they had no intention to raise rates regardless of the result, yet traders continue to assume a rate hike will be inevitable.
Not unexpectedly, the comparison to prices before the pandemic saw everything from food, up 2.4%, and restaurant meals, up 3.8%, as well as used car prices, up 82%, moving higher.
Energy was the only sector to finish in positive territory, with consumer-facing businesses like Amazon (NASDAQ: AMZN) and PayPal (NASDAQ: PYPL) the hardest hit, down 2.2% and 3.5%, respectively.
US stock market movers
Here’s how other popular US stocks fared in the choppy session on Wednesday.
- Intuit (NASDAQ: INTU) up 1.2%
- Microsoft (NASDAQ: MSFT) down 2.9%
- Tesla (NASDAQ: TSLA) down 4.4%
- Workday (NASDAQ: WDAY) down 5.2%
- MercadoLibre (NASDAQ: MELI) down 5.7%
- Square (NASDAQ: SQ) down 6.3%
- Affirm (NASDAQ: AFRM) down 10.2%
- Virgin Galactic (NASDAQ: SPCE) down 11.3%
Back home on the ASX, the S&P/ASX 200 (ASX: XJO) is heading towards another negative open on Thursday. For all the latest, check out Rask Media’s ASX 200 morning report.