(New York and Toronto) The New York Stock Exchange fell sharply on Wednesday as the market worried that the US economy was overheating after April inflation figures were higher than expected.
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The Dow Jones fell 1.99% to 33,587.66 points, its largest single-session drop since January.
The NASDAQ fell 2.67% to 13,031.68 points, its worst session since March.
The broader S&P 500 index plunged 2.14% to 4,063.04 points, its largest decline since February.
The Toronto Stock Exchange’s S & P / TSX Composite Index fell 166.27 points to end the day at 19,107.77 points.
In the currency market, the Canadian dollar traded at an average rate of 82.67 cents US, unchanged from the previous day.
On the New York Commodity Exchange, the price of crude oil climbed 80 cents US to US $ 66.08 a barrel, while that of gold fell US $ 13.30 to $ 1,822.80 US per ounce. Copper prices edged down 2.6 cents US to close near US $ 4.74 per pound.
Inflation, measured by the CPI consumer price index, hit 0.8% in April, on a month-to-month basis, according to the Labor Department. Over twelve months, the price increase reached 4.2%, the highest in 13 years.
This figure surprised analysts who expected a more modest rise in prices for the month, of only 0.2%.
It raises questions about an adjustment to the ultra-accommodating monetary policy of the Federal Reserve (Fed), which has supported the US economy since the start of the pandemic thanks to low key rates and a vast asset buyback program.
“Even if the Fed repeats over and over again that it is ready to let inflation rise, believing that this jump is temporary, the market has let it be known today that it does not believe this message,” said Art Hogan of National Holdings.
The expert also underlines that galloping and uncontrolled inflation could ultimately have a negative impact on the income and profits of listed companies.
Symbol of this fear of a too rapid rise in prices, the 10-year rate on the American debt, which moves in the opposite direction to the price of bonds, climbed and stood at the end of the day at 1.70% against 1, 62% the night before.
Among the values of the day, the American video game giant Electronic Arts lost 1.79% despite better than expected quarterly results and optimistic forecasts for the year as a whole.
Amazon lost 2.23%, pulled down like the other American tech pillars. The e-commerce giant, however, obtained an important victory on Wednesday against the European Commission after the European Court of Justice validated the tax rebates obtained by the group in Luxembourg.
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