U.S. equity indices were in turmoil before closing lower as investors digested the impact of U.S. inflation data on the implementation of a rate hike by the Federal Reserve (Fed).
The annual Consumer Price Index (CPI) data for April stood at 8.3%compared with March's 8.5%, even though it surpassed the estimate of 8.1%.
Ingalls & Snyder’s senior portfolio strategist Tim Ghriskey summed up that the inflation figures on display were bad news that added to recessionary concerns.
He added that the horizontal yield curve has given a less favorable sign as it refers to the difference between long -term and short -term Treasury yields leading to the prospect of a recession.
The Wall Street market saw the average Dow Jones Industrial index fall 326.63 points or 1.02% at 31,834.11, the S&P 500 lost 65.87 points or 1.65% at 3,935.18 and the Nasdaq Composite down 373.44 points or 3.18% at 11,364.24.
MSCI's worldwide stock index fell 0.88%, its lowest level since November 2020.
According to The Leuthold Group's head of strategy, Kim Paulsen, although inflation is still high in general, it is starting to seem to be moderating.
Clearly, it can add a bit of excitement as year -on -year inflation readings are seen to have started to change direction.
The currency summary showed the dollar index was at 0.067% with the Euro down 0.13% at $ 1.0513.
The yen strengthened 0.35% against the dollar at 129.97 per dollar while Sterling was down 0.62% at $ 1.2245.
Meanwhile, the benchmark 10 -year Treasury yield fell to a one -week low but after the inflation data was released, yields started to rise to a 3 -year high of 3.203% before falling again.
The 10 -year benchmark note rose 20/32 in price to yield at 2.9148% from 2.993, while the 30 -year bond rose 57/32 in price to yield at 3.026% from 3.129% and the 2 -year note fell 1/32 in price to yield on 2.6371% from 2.623%.
Meanwhile, spot gold added 0.8% at $ 1,852.79 per ounce.
