Inflation in America raises expectations of raising interest rates.. the Fed holds a surprise for the markets….
US stock indices futures trading is still fluctuating in a relatively narrow range after the selling pressure inflicted on it after the release of the US consumer price index for August, which showed an annual increase of 8.3%, while it was expected to come in an annual increase of 8.1% After rising 8.5% in July. It also came, excluding food prices, at an annual increase of 6.3%, while it was expected to rise by 6%, after a rise of 5.9% in July, which shows a growth in inflationary pressures greater than expected and on a larger scale.
Also yesterday, on the production level, the producer price index, excluding food prices from the United States, came in with an increase of 7.3%, while it was expected to rise by only 7.1%, after an increase of 7.7% in July, while the broader producer price index, which includes Food and energy prices are on an annual increase of 8.7%, while an increase of 8.8% was expected after a 9.8% increase in July, to show more the impact of the decline in energy prices on the production level during the month of August.
Wall Street closed lower on fears of monetary tightening and warnings of recession Wall Street ended lower on Thursday, after extending losses in late trading, as a slew of economic data failed to change the expected course of policy tightening by the Federal Reserve. The Federal Reserve (the US central bank) amid growing warnings of a global recession.
Selling accelerated at the end of the session, and leading stocks including Microsoft (NASDAQ:MSFT), Apple and Amazon (NASDAQ:AMZN) pressured the Nasdaq index, which is filled with technology stocks.
Interest rate-sensitive banking stocks helped ease the pressure on the Dow Jones Index.
A mixed batch of economic data, led by better-than-expected retail sales, boosted the likelihood of a further 75 basis point rate hike at the conclusion of the Federal Reserve’s monetary policy meeting next week.
According to preliminary data, the Standard & Poor’s 500 index fell 44.40 points, or 1.13 percent, to close at 3,901.61 points, while the Nasdaq Composite lost 166.19 points, or 1.42 percent, to 11553.49 points. The Dow Jones Industrial Average fell 173.24 points, or 0.56 percent, to 30,961.85 points at the close.
Crude oil prices, specifically Brent crude, have traded at less than $100 per barrel since the beginning of last August, and recovery attempts have failed above this level. Experts at Commerz Bank expect the price of Brent crude to fall by the end of this year near the level of $70 per barrel.
Experts at the German Commercial Bank pointed out that fears of weak demand due to the expected recession in the United States and Europe, in addition to the closure restrictions in China would negatively affect crude oil prices, and therefore it is likely weak demand for crude oil, which is still strong so far.
At the same time, experts at Commerz Bank spoke that OPEC Plus’ study of reducing oil production during October would not result in a small reduction in production levels, and this, in turn, would make a barrel of oil record about $90 a barrel for Brent crude.