Summary | Growing expectations for Fed interest rate hikes spur US stocks lower.
Xinhua News Agency, New York, Summary November 10 | Increasing expectations for the Federal Reserve to raise interest rates caused a decline in US stocks.
Xinhua News Agency reporter Liu Yanan.
As the latest inflation data showed that core US inflationary pressures persisted in October, and market expectations for the US Federal Reserve to continue raising interest rates rose, New York's three major stock indexes fell across the board on the 10th.
As of today's close, the Dow Jones index fell by 157.86 points from the previous trading day and closed at 52231.89 points, a decrease of 0.30%; The S&P 500 stock index fell by 29.01 points and closed at 7520.93 points, a decrease of 0.38%; The Nasdaq composite index fell by 187.264 points and closed at 25065.87 points, a decrease of 0.74%.
Data published by the US Department of Labor on the 10th showed that due to the decrease in energy price increases, the Consumer Price Index (CPI) in the US rose by 0.4% month-on-month in October, lower than 0.6% in September. However, the month-on-month increase in the core index excluding food and energy prices remained unchanged at 0.3%.
After the release of the data, market expectations for the Federal Reserve to raise interest rates rose significantly. The two-year US Treasury bond yield, which is closely linked to short-term interest rates, rose sharply by more than 17 basis points, hitting a maximum of 4.778% on the day; The 10-year Treasury bond yield rose by more than 9 basis points, reaching a maximum of 5.025%.
Data released by the Chicago Federal Reserve's watchdog at 10 p.m. showed the probability the Fed would raise interest rates by 50 basis points at its December rate meeting rose to 11.8 percent from zero the previous day.
Kevin Hassett, director of the White House's National Economic Council, said in an interview with the media on the 10th that the inflation figures published that day were "disappointing".
Federal Reserve Board Governor Christopher Waller said at an event in London on 10/10 that the Federal Reserve should raise interest rates in December even if inflation cools in October. If inflation worsens, the Fed should consider raising interest rates by 50 basis points at a time.
Christopher Hodge, chief US economist at Natixis, said the month-on-month increase in the US core index remained at 0.3% for the third month in a row, which is unacceptable to the Federal Reserve. Given the stickiness of inflation and Waller's comments, a 50 basis point rate hike in December is an option for the Fed.
Samuel Toombs, an economist at Pantheon Macroeconomic Research UK, said that while Waller believes the Fed should consider raising interest rates 50 basis points at a time, most Fed officials may be more cautious.
Lori Logan, president of the Dallas Fed, said on the 10th that given the current situation, the Fed should raise interest rates at least twice, by 25 basis points each time. Logan believes the pace of the Fed's rate hikes depends on the recent economic and financial environment, and aims to quickly strike a balance between inflation and employment risks. In addition to inflationary factors, Nvidia's share price fell another 5.47% on the 10th, which also dragged down the main stock indices of the New York Stock Exchange. The company's market capitalization once fell below $4 trillion.