Wall Street’s main indexes opened lower on Tuesday after October consumer price data exceeded economists’ expectations, according to Yahoo.
The consumer price index increased 0.4 per cent in October, topping forecasts for a 0.3 per cent rise. The U.S. Labor Department reported the data. Headline consumer prices increased 0.4 per cent. Core inflation rose 0.3 per cent.
The numbers added to uncertainty about the Federal Reserve’s December interest rate decision. Selling pressure returned following a volatile week in the markets.
At the opening bell, the Dow Jones Industrial Average dropped 226.5 points, or 0.43 percent, to 52,163.21. The S&P 500 fell 36.8 points, or 0.49 percent, to 7,513.09. The Nasdaq Composite dropped 205.7 points, or 0.81 percent, to 25,047.448.
The hotter-than-expected inflation data for October threatened to pause a two-day rebound in tech shares. Selling pressure had rattled markets last week.
The inflation figures followed a recovery session on Monday. The Nasdaq Composite gained 673.71 points, or 2.7%, to close at 25,253.14. The S&P 500 rose 2.4%, and the Dow advanced 2.2%.
Technology, semiconductor, and airline shares contributed to the previous session’s gains. Lower crude oil prices coincided with improved equity market sentiment.
Crude oil futures fell more than 4% after President Donald Trump indicated that further military action against Iran was unlikely while negotiations continued.
Federal Reserve Governor Christopher Waller indicated he was considering supporting a rate increase at the December policy meeting. He spoke ahead of the inflation report, stating that he was leaning toward strong action if price growth exceeded forecasts.
Hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take.
Federal Reserve Governor Christopher Waller
The Federal Reserve’s eventual decision will depend on its assessment of inflation, employment, and economic conditions.
Nvidia shares declined 4.4% following an investigation announcement regarding reports that Chief Executive Officer Jensen Huang had been targeted by a foreign intelligence effort. This occurred despite the market rebound on Monday.
Other semiconductor manufacturers, including Advanced Micro Devices and Intel, recorded gains during the session.
Some of Nvidia’s biggest rivals have been attracting particular attention today as shares in the likes of AMD and Intel enjoyed a Monday bounce.
Danni Hewson, Head of Financial Analysis at AJ Bell
Earlier coverage: Wall Street Sells Off as October Consumer Prices Exceed Forecasts