Tuesday, November 30

Wall Street fell as data raises fears of long-term inflation

Unofficially, The Dow Jones Industrial Average fell 241.69 points, or 0.67%, to 36,078.29 units., while the S&P 500 lost 38.54 points, or 0.82%, to 4,646.71. The Nasdaq fell 264.41 points, or 1.66%, to 15,622.13 units..

The technology sector weighed the most in the S&P 500, with Apple Inc and Microsoft Corp among the biggest burdens..

“It’s no wonder that after what was a really historic streak the market paused,” said Ross Mayfield, investment strategy analyst at Baird. “We believe there is enough favorable wind until the end of the year for the market to go up.”

The Consumer Price Index (CPI) of the Labor Department jumped 0.9%, more than expected, and the highest year-on-year increase in 31 years.

The report hinted that persistent problems in the global supply chain could make the current wave of inflation take longer to subside than many expected, including the US Federal Reserve.

“The story of inflation is really the engine that drives all things,” Mayfield added. “It will affect Federal Reserve policy and fiscal policy, it is the engine of interest rates. It is difficult to talk about anything other than inflation.”

Gregory Daco, chief economist at Oxford Economics, believes this report means that current price increases have some degree of permanence.

“I think things will continue to get worse before the inflation outlook improves because we don’t see core inflation reaching its peak until sometime in early 2022,” Daco said.

The CBOE volatility index, a measure of investor anxiety, reached its highest level in nearly a month.


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