NEW YORK, July 13 — Wall Street stocks opened sharply lower today after fresh consumer price data exacerbated recession fears, as the Federal Reserve aggressively hikes interest rates.
All three major indices were down more than one per cent early today following the report, which showed US inflation surging to a record peak of 9.1 per cent in June over the last 12 months in a report that was worse than expected. Driven by record-high gasoline prices, the consumer price index jumped 1.3 per cent in June. Gasoline prices have retreated in recent weeks, however, a shift that some analysts predict will lead to moderating inflation in subsequent reports.
Cresset Capital’s Jack Ablin called the report a “setback” that boosts the likelihood the Fed will again institute a three-quarter-point interest rate increase later this month.“This is a setback for the market, this is a setback for the economy. It is all but certain the Fed will raise rates three quarters of a percentage point this month. And it increases the likelihood of recession.”The broad-based S&P 500 fell 1.2 per cent to 3,773.15, while the tech-rich Nasdaq Composite Index shed 1.
Among individual companies, Delta Air Lines fell 5.8 per cent after reporting lower-than-expected earnings, as spiking fuel prices offset some of the gains from strong consumer demand for flying. — AFP