Dow Recovers After Dropping 700 Points Following Unexpected Core CPI Rise
The S&P 500 fell 0.36% and the Nasdaq Composite index rose 0.24%.
The US markets slumped on Wednesday following the release of core inflation data where it defied expectations and rose during last month.
While the Dow Jones Industrial Average had slumped 700 points it recovered from the fall, the index, as of 12:49 p.m. ET, was trading 296.93 points or 0.73% lower. The S&P 500 fell 0.36% and the Nasdaq Composite index rose 0.24%.
The stocks of Trump Media & Technology Group Corp. fell as much as 18% after traders reduced their positions following last night's Donald Trump's debate debate against Kamala Harris. This was the biggest intraday drop for the share since April.
The markets slumped after the US consumer price index saw an increase of 0.2% driven by a surge in housing costs. The core consumer price index, which excludes food and energy costs, saw a 0.3% jump from July and 3.2% from the previous year.
"The numbers aren’t runaway dovish, but they confirm the cooling process remains in effect. Attention could now shift from the Fed as a catalyst toward earnings and the election cycle," David Russell at Trade Station told Bloomberg.
A surge in shares of the world's largest tech companies boosted the US stock market on Tuesday, offsetting a wave of cautious remarks from American bank executives that led to declines in financial stocks. While the S&P 500 rose 0.45% and the Nasdaq 100 added 0.9%, the Dow Jones Industrial Average fell 0.2%.
The fall in the financial stocks came after Bank of America Corp. reported that its investment-banking performance would be lower than some Wall Street expectations. Earlier this week, Goldman Sachs Group Inc. indicated that its trading division might experience a 10% decline compared to the previous year. Additionally, Ally Financial Inc. warned of worsening credit conditions among its borrowers.
Besides, the US 10-year yields advanced three basis points on Wednesday morning at 3.67%.
Brent rebounded on Wednesday and was trading near $70 per barrel, after it touched $68.68 on Tuesday, the lowest intraday price since December 2021, according to Bloomberg.
