On Thursday, the major stock market indices in Wall Street went down because the yields on Treasury bonds increased. This happened due to a report that revealed that consumer prices in the United States rose more than what was anticipated for the month of September. However, it’s worth noting that the increase in prices wasn’t as strong as some had feared.
The report from the Labor Department indicated that consumer prices in the U.S. went up by 0.4% in September. This was slightly higher than the 0.3% rise that experts surveyed by Reuters had predicted. Over the span of 12 months leading up to September, prices went up by 3.7%, which was also a tad more than the estimated 3.6%.
The Core Consumer Price Index (CPI), which doesn’t include the prices of food and energy, increased by 0.3%, matching what experts expected.
Art Hogan, who is the chief market strategist at B. Riley Wealth, pointed out, “People tend to focus on the big headline numbers, but it’s really crucial to pay attention to the core CPI because that’s what the Federal Reserve uses to guide its decisions.”
Hogan believes that the Federal Reserve might end up being too cautious in the first part of next year, and their probable move would be to gradually lower interest rates in the latter half of the year.
More data revealed that 209,000 new jobless claims were filed for the week ending on October 7th, which was slightly lower than the expected increase of 210,000.
The interest rate on the 10-year U.S. government bonds, known as the 10-year yield, went up to 4.638% after declining for the past two days.
Traders in the financial markets are starting to believe that there’s a higher chance the Federal Reserve will raise interest rates once more this year and possibly maintain those higher rates for a longer period into the next year.
Boston Fed President Susan Collins mentioned on Wednesday that while there’s a greater chance the economy won’t fall into a recession, it’s still possible that the central bank will continue to increase interest rates as part of its efforts to bring inflation back to its target level.
We’re anticipating comments from other Federal Reserve officials, like Atlanta’s Raphael Bostic, today.
The minutes of the Fed’s meeting held on September 19-20 revealed that there’s growing uncertainty about the direction of the U.S. economy. There are concerns due to unpredictable economic data and the tightening of financial markets, which could potentially harm economic growth.
In a different news context, Israel has stated that it won’t ease its restrictions on the Gaza Strip for humanitarian reasons until all of its hostages are released. As per reports, the Israeli death toll has surpassed 1,300, while Gaza authorities report that over 1,354 Palestinians have lost their lives, with more than 6,000 wounded in retaliatory attacks.
As of 9:55 a.m. Eastern Time, the Dow Jones Industrial Average was down by 94.20 points, the S&P 500 had decreased by 10.30 points, and the Nasdaq Composite was lower by 19.61 points. Real estate and consumer staples sectors within the S&P 500 were among the hardest hit, while the energy sector saw gains.
Fastenal saw a 5% increase in its stock price after the industrial supplies company exceeded profit expectations for the third quarter.
On the New York Stock Exchange (NYSE), declining stocks outnumbered advancing ones by a ratio of 2.76-to-1, and on the Nasdaq, the ratio was 2.43-to-1.
The S&P index reported 14 new 52-week highs and 15 new lows, while the Nasdaq recorded 22 new highs and 137 new lows.
