NEW YORK, Sept 14 — A broad sell-off sent US stocks reeling on Tuesday after a hotter-than-expected inflation report dashed hopes that the Federal Reserve could relent and scale back its policy tightening in the coming months.
“ is not a surprise given the rally running up to the data,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. The report points to “very persistent inflation and that means the Fed is going to remain engaged and raise rates,” Nolte added. “And that’s an anathema to equities.” Financial markets have fully priced in an interest rate hike of at least 75 basis points at the conclusion of the FOMC’s policy meeting next week, with a 32 per cent probability of a super-sized, full-percentage-point increase to the Fed funds target rate, according to CME’s FedWatch tool.
The Dow Jones Industrial Average .DJI fell 1,276.37 points, or 3.94 per cent, to 31,104.97, the S&P 500 .SPX lost 177.72 points, or 4.32 per cent, to 3,932.69 and the Nasdaq Composite .IXIC dropped 632.84 points, or 5.16 per cent, to 11,633.57.Communications services .SPLRCL, consumer discretionary .SPLRCD and tech .SPLRCT shares all plummeted more than 5 per cent, while the tech subset semiconductor sector .SOX sank 6.2 per cent.
Source: News Formal (newsformal.com)
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