Stocks fall as inflation rises

  • The S&P 500 and the Nasdaq Composite recorded their third consecutive loss on Tuesday.
  • Headline consumer price inflation in March hit a 41-year high of 8.5% versus an estimate of 8.4%.
  • “Inflation is too high” Federal Reserve Governor Leal Brainard told a Wall Street Journal summit.

U.S. stocks ended lower on Tuesday, giving up earlier gains as investors refocused on headline consumer price inflation which hit a 41-year high and is expected to keep the

Federal Reserve

on track for strong interest rate hikes.

The S&P 500 and Nasdaq Composite had been higher earlier on Tuesday but ended up posting their third consecutive losses. Only the energy and utilities sectors advanced among the 11 tracked on the S&P 500.

Stocks had risen after investors focused on the March reading of core inflation – which strips out volatility in food and energy prices. Core prices in March rose 0.3% month-on-month, slower than 0.5% in February and the annual rate of 6.5% was just below the consensus estimate for 6.6% from Econoday.

But on Tuesday, Federal Reserve Governor Lael Brainard appeared to be mostly focused on headline inflation accelerating to 8.5% year-over-year, the fastest rise since December 1981. Gasoline prices soared last month, and rising housing and food prices also contributed to the stock’s rise. inflation of 7.9% in February.

“Inflation is too high,” Brainard said at a Wall Street Journal summit. “Reducing inflation is going to be our most important task,” said Brainard, seen as a dovish voice at the central bank.

Here’s where the US indices were at 4:00 p.m. Tuesday:

Stocks have suffered this year on expectations that the Fed will quickly raise interest rates to rein in inflation, which in turn could fuel a slowdown in the world’s largest economy.

In the markets, Russian Railways has become the first company to officially default in the country, hurt by Western sanctions after Moscow launched a war against Ukraine. Meanwhile, a global credit committee has been tasked with adjudicating on Russia’s bond default.

‘The Big Short’ investor Michael Burry warned in a now-deleted tweet on Monday night that US stocks were heavily overvalued and on the verge of a tumble.

Oil prices were mixed. West Texas Intermediate crude gained 5.7% to $100.53 a barrel. Brent crude, the international benchmark, fell 0.2% to $104.46.

Gold rose 1.2% to $1,971.90 an ounce. The 10-year yield fell 7 basis points to 2.71%.

Bitcoin lost less than 0.1% to $39,481.59.

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