Stocks Crushed by Inflation Shock; Yields Surge: Markets Wrap

S&P 500




Dow 30








Russell 2000




Crude Oil
















10-Yr Bond
















CMC Crypto 200




FTSE 100




Nikkei 225




(Bloomberg) — US stocks plunged and Treasury yields spiked higher after consumer prices rose faster than expected last month, as traders boosted bets the Federal Reserve will raise interest rates sharply next week.

Most Read from Bloomberg

The World’s Hottest Housing Markets Are Facing a Painful Reset

Ukrainian Successes Raise Russian Collapse to Realm of Possibility

Jeff Bezos’s Blue Origin Rocket Suffers Failure Seconds Into Uncrewed Launch

Russian Defenses Crumble as Ukraine Retakes Key Territory

Goldman to Cut Several Hundred Jobs Starting This Month

The S&P 500 tumbled at the open, snapping a four-day rally. The two-year Treasury yield, the most sensitive to policy changes, jumped about 16 basis points. Swaps traders are now pricing in a rate increase of three-quarters of a percentage point. A gauge of the dollar reversed a decline to trade 0.9% higher.

The consumer price index increased 0.1% from July, after no change in the prior month, Labor Department data showed Tuesday. From a year earlier, prices climbed 8.3%, a slight deceleration but still more than the median estimate of 8.1%. So-called core CPI, which strips out the more volatile food and energy components, advanced 0.6% from July and 6.3% from a year ago, also topping forecasts.

“The recent bounce in equities looked incredibly ill-judged and premature,” said James Athey, investment director at Abrdn. “That CPI number is very strong relative to consensus and will not be what the Fed wanted to see at all. The chance of the pace of hikes slowing after September has receded somewhat as a result of this data.”

More comments

“Headline inflation has peaked but, in a clear sign that the need to continue hiking rates is undiminished, core CPI is once again on the rise, confirming the very sticky nature of the US inflation problem,” Seema Shah, chief global strategist at Principal Global Investors, said in a note. “In fact, 70% of the CPI basket is seeing an annualized price rise of more than 4% month-on-month. Until the Fed can tame that beast, there is simply no room for a discussion on pivots or pauses.”

“The CPI report was an unequivocal negative for equity markets,” wrote Matt Peron, director of research at Janus Henderson Investors. “The hotter than expected report means we will get continued pressure from Fed policy via rate hikes. It also pushes back any “Fed pivot” that the markets were hopeful for in the near term.”

The latest inflation data came amid debate about the outlook for the global economy and how that will affect markets. Stocks have rallied in recent days, with the S&P 500 completing its biggest four-day surge since June on Monday. JPMorgan Chase & Co. said a soft landing is becoming the more likely scenario for the global economy, but Bank of America Corp.’s latest survey showed the number of investors expecting a recession has reached the highest since May 2020.

The Stoxx Europe 600 index reversed an advance, with real estate and retail shares leading the decline. The rallyu in crude oil stalled as the dollar’s ascent offset global demand concerns. Bitcoin fell below $22,000.

What’s your dollar bet ahead of the Fed decision? This week’s MLIV Pulse survey asks about the best trades ahead of the FOMC meeting. Please click here to share your views anonymously.

Here are some key events to watch this week:

UK CPI, Wednesday

US PPI, Wednesday

US business inventories, empire manufacturing, retail sales, initial jobless claims, industrial production, Thursday

China home sales, retail sales, industrial production, fixed assets, surveyed jobless rate, Friday

Euro area CPI, Friday

US University of Michigan consumer sentiment, Friday

Some of the main moves in markets:


The S&P 500 fell 2% as of 9:31 a.m. New York time

The Nasdaq 100 fell 2.7%

The Dow Jones Industrial Average fell 1.6%

The Stoxx Europe 600 fell 1.1%

The MSCI World index fell 1.7%


The Bloomberg Dollar Spot Index rose 0.8%

The euro fell 0.9% to $1.0026

The British pound fell 1.1% to $1.1555

The Japanese yen fell 1% to 144.27 per dollar


The yield on 10-year Treasuries advanced eight basis points to 3.43%

Germany’s 10-year yield advanced eight basis points to 1.73%

Britain’s 10-year yield advanced six basis points to 3.14%


West Texas Intermediate crude rose 0.5% to $88.21 a barrel

Gold futures fell 1.8% to $1,709.50 an ounce

Most Read from Bloomberg Businessweek

Google’s Loon Project Gets Resurrected. Without Google. Or Balloons

Startups Are Borrowing More as the Easy Venture Capital Money Vanishes

The Alzheimer’s Drug Approval Mess Has Left Millions of People in Limbo

Dry Cleaners Were Disappearing Even Before the Pandemic

The Ethereum Merge Ups the Stakes—and Reshapes the Crypto Universe

©2022 Bloomberg L.P.



US Inflation Tops Forecasts, Cementing Odds of Big Fed Hike

(Bloomberg) — US consumer prices were resurgent last month, dashing hopes of a nascent slowdown and likely assuring another historically large interest-rate hike from the Federal Reserve.Most Read from BloombergThe World’s Hottest Housing Markets Are Facing a Painful ResetUkrainian Successes Raise Russian Collapse to Realm of PossibilityJeff Bezos’s Blue Origin Rocket Suffers Failure Seconds Into Uncrewed LaunchRussian Defenses Crumble as Ukraine Retakes Key TerritoryGoldman to Cut Several Hund

Investor’s Business Daily

CPI Inflation Rate Slides, But Hot Core Prices Are Bad News For The Fed And Dow Jones

The CPI inflation rate continued to pull back from a 40-year peak in August, but less than expected. Core inflation, which strips out food and energy prices, unexpectedly reaccelerated from July’s tamer pace. Following the CPI report, which cinches a big Fed rate hike next week, the Dow Jones industrial average turned sharply lower in early Tuesday stock market action.


US STOCKS-Futures point to higher open as focus shifts to inflation data

U.S. stock index futures rose on Monday as investors positioned themselves for a crucial inflation reading this week that could determine the pace of interest rate hikes by the Federal Reserve. Focus is on consumer prices data on Tuesday for any signs that price pressures may be easing. Headline inflation is expected to rise at an 8.1% pace over the year in August, compared with 8.5% in July.


US Inflation Data Will Determine If Stock Rally Continues

(Bloomberg) — The S&P 500 Index is on a roll, posting its best four-day rally since early July partly on the back of hopes that inflation data due Tuesday morning will show some cooling off ahead of next week’s Federal Reserve meeting.Most Read from BloombergThe World’s Hottest Housing Markets Are Facing a Painful ResetJeff Bezos’s Blue Origin Rocket Suffers Failure Seconds Into Uncrewed LaunchUkrainian Successes Raise Russian Collapse to Realm of PossibilityRussian Defenses Crumble as Ukraine

Yahoo Finance

Inflation sets the scene for the Fed: What to know this week

This week’s inflation readings are the last big economic data points that may sway the Federal Reserve’s next policy decision when officials convene later this month to deliver another interest rate hike.


BofA Survey Shows Investors Fleeing Equities en Masse on Fear of Recession

(Bloomberg) — Investors are fleeing equities en masse amid the specter of a recession, with allocations to stocks at record lows and cash exposure at all-time highs, a Bank of America Corp. survey showed.Most Read from BloombergThe World’s Hottest Housing Markets Are Facing a Painful ResetUkrainian Successes Raise Russian Collapse to Realm of PossibilityJeff Bezos’s Blue Origin Rocket Suffers Failure Seconds Into Uncrewed LaunchRussian Defenses Crumble as Ukraine Retakes Key TerritoryGoldman to

Motley Fool

Here’s Why Nio Stock Is Exploding Today

Nio (NYSE: NIO) stock exploded this morning and was trading nearly 10.3% higher as of 11 a.m. ET Monday. An analyst who closely tracks the Chinese electric vehicle (EV) market just singled out the hot stock as his top EV pick in China and sees Nio shares doubling in value over the next 12 months, backed by two big growth catalysts. Deutsche Bank analyst Edison Yu has two reasons why Nio could outperform and emerge as the leader among EV start-ups, according to The Fly.

Motley Fool

Prediction: 3 Growth Stocks That Could Be Worth $1 Trillion by 2030

In the hit movie The Social Network, which recounts the founding story of Meta Platforms’ (NASDAQ: META) Facebook, a key character tells a young Mark Zuckerberg that his company is headed for a billion-dollar valuation. Let’s take a closer look at three stocks with real potential to be trillion-dollar companies by 2030, delivering strong gains for investors along the way (spoiler alert: Zuckerberg’s Meta Platforms is one of them).

Leave A Reply

Your email address will not be published.