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29/05/24
212
Wall Street Drop Sharply on Inflation Worries
On Wednesday, stocks on Wall Street dropped on growing worries that upcoming inflation data would result in the Federal Reserve delaying cutting interest rates.
The NASDAQ Composite dropped 125 points, or 0.7%, the S&P 500 fell 40 points, or 0.8%, and the Dow Jones Industrial Average fell 385 points, or 1%.
U.S. stocks were generally flat in anticipation of this week’s key inflation data. The Federal Reserve’s preferred inflation measure, PCE price index data, is due on Friday, and will likely factor into the central bank’s interest rate outlook.
Indications of persistent inflation have resulted in several officials in recent days suggesting that they would prefer more evidence of easing prices before beginning to cut rates.
On Tuesday, Neel Kashkari, the Minneapolis Fed President said that the Federal Reserve had not yet ruled out rate hikes.
More officials from the Fed, including Cleveland Fed President Loretta Mester and New York Fed President John Williams will be speaking before the reading on Friday.
On Wednesday, preliminary data harmonized with other countries in the European Union showed that in May, German inflation lifted slightly more than anticipated to 2.8%, an indication that there are still price pressures in Europe’s biggest economy.
This puts the focus firmly on inflation figures from the wider eurozone, due on Friday.
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