Markets Volatile as U.S. Core Inflation Increases in September

U.S. stocks fell Monday as concerns about Fed tightening, a possible recession and an escalating Ukraine war continue to rattle markets.

The Nasdaq fell 110 points on Monday, hitting its lowest closing value since July 2020. Meanwhile the Dow slipped 94 points, and the S&P 500 dropped 27. The TSX was closed for trading on Monday.

The S&P 500 and the Nasdaq fell again Tuesday in volatile trading, perhaps stoked by Bank of England Governor Andrew Bailey’s warning that the central bank’s plan to rescue pension funds hit by interest-rate increases will end Friday, as scheduled. Bailey’s comments raised the prospect of more chaos in global bond markets and weighed on Wall Street sentiment.

By Tuesday’s close, U.S. stocks were mixed. The Dow climbed 36 points, the S&P 500 lost 23, and the Nasdaq dropped 116 points, falling into bear-market territory for the second time this year. Meanwhile the TSX plunged 366 points on Tuesday, hitting its lowest closing level since March 2021.

U.S. and Canadian stock indexes registered minor losses on Wednesday as investors anxiously awaited Thursday’s latest U.S. inflation data. Heightening investor worries was Wednesday afternoon’s release of the Fed’s September minutes, which showed officials remain acutely concerned over the threat of high inflation.

According to data released Thursday morning, overall U.S. inflation rose 8.2% in September (year over year), which was slightly down from August’s 8.3% pace. More troubling, however, was the latest core inflation reading, which strips out energy and food prices. The core index climbed 6.6% (year over over), the fastest pace of annual increase since 1982.

Although North American equity markets fell sharply Thursday in early trading, indexes stabilized after the selloff, mounting an almost inexplicable comeback throughout the day. By Thursday’s close, the Dow had surged more than 800 points, the S&P 500 jumped 93, and the Nasdaq climbed 232 points. In Canada, the TSX also turned in a strong performance, adding 407 points, buoyed by energy and financials.

Dow, TSX and S&P 500 Gain Ground; Nasdaq Slightly Off

For the four trading days covered in this report, the Dow rose 742 points to close at 30,039, the S&P 500 added 30 points to settle at 3,670, while the tech-heavy Nasdaq inched 3 points lower to close at 10,649. In Canada, the TSX climbed 31 points to end at 18,614.

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source https://rosenbergdri.ca/markets-volatile-as-u-s-core-inflation-increases-in-september/