Wall Street accelerates the fall, and the Dow Jones loses 1.99%
Wall Street dropped on Wednesday caused by fear of the rebound in inflation in the US. Its leading indicator, the Dow Jones of Industrialists, fell by 1.99% in the middle of intense sales in the last minutes.
At the close of the New York Stock Exchange session, the Dow Jones yielded 681.50 units to 33,587.66. The selective S&P 500 fell by 2.14% or 89.06 points, to 4,063.04.
The Nasdaq Composite Index, grouping together several high-valuation tech companies, took the biggest hit. It experienced a sharp loss of 2.67% or 357.74 points to 13,031.68.
Almost all sectors ended in the red, with the most significant loss for non-essential goods (-3.28%), technology (-2.86%), and basic materials (-2.56%) companies. Energy companies climbed by 0.06%.
The New York stock market suffered its third consecutive loss, and the worst since January for the Dow Jones, in reaction to consumer price data in April, which showed an increase in inflation faster and stronger than expected.
The consumer price index in the United States rose by 0.8% in April and has placed year-on-year inflation at 4.2%. As stated by the Bureau of Labor Statistics, it’s the highest increase since 2008.
Investors worry that the Fed will withdraw the stimulis
Fed Vice President Richard Clarida expressed his surprise at the data but reiterated the message he maintained in recent weeks. There will be notable price increases, but they will be transitory, and no change in interest rates is expected.
However, investors fear that the central bank will initiate the withdrawal of the extraordinary monetary stimuli earlier than expected.
The data generated strong movements in the debt market, raising the US 10-year Treasury bond yield to 1,695% at the close of the session when volatility soared.
The Vix index, known as the “fear indicator,” measuring volatility in the market, increased by 27% in the last part of the day. It happened when there were massive sales of shares.
Among the 30 listed companies of the Dow Jones, the falls of Home Depot, Honeywell, Boeing, and Microsoft stood out.
Only Merck, known as MSD outside the US and Canada, closed in green with a 0.64% advance, and Chevron ended with gains of 0.63%.
