Expect More Volatility: Stock Market Swings After Inflation Fuels Uncertainty Over Fed Rate Hikes

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Stocks stumbled Tuesday after data revealed inflation isn’t slowing down as quickly as economists expected.

to Labor Department data released Tuesday, gaining at a faster pace than economists forecasted and throwing a wrench into Wall Street’s hopes that the Federal Reserve would further ease its interest rate hike plans in its campaign to slow inflation.

The Dow Jones Industrial Average subsequently fell as much as 420 points, or 1.1%, before paring losses to fall just 130 points by 1:30 p.m. ET while the S&P 500 fell 0.1% and the tech-heavy Nasdaq dropped rose 0.1%. Oanda analyst Edward Moya dubbed the moves another “inflation rollercoaster” in a Tuesday note to clients, explaining “disinflation trends” allowing the Fed to slow its roll are “in danger.”

Stocks have indeed endured numerous turbulent rides upon the CPI’s monthly reading: The Dow has moved an average of 1.85% on the last 10 CPI release dates, more than double the 0.87% average movement during the 180 non-CPI trading days during the timeframe, according to aIn fact, CPI release days accounted for four of the Dow’s eight largest daily swings over the last 10 months, including the Dow’s 3.

 

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Haven’t they heard, Janet Yellen assured us it’s temporary

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